Master of Communications Management

“Identification of Key Strategic Factors to the Financial Performance of ICT

Companies in an Emerging Competitive Environment and Global Technology
Converged World. Case of Rwanda Broadcasting Agency-RBA.”

By Gedeon HAKIZIMANA
Student ID: 219015721

Supervisor: Professor Barry Kingsland

Submission date: June 2020

Word Count: 19,707 words

ABSTRACT
This study was undertaken to identify Key Strategic Factors to the Financial Performance of ICT
Companies in an Emerging Competitive Environment and Global Technology Converged World,
Case of Rwanda Broadcasting Agency (RBA). In general, it intended to scrutinize the factors that
positively contribute to the financial performance of ICT businesses and help to maintain that
financial health in an increasingly competitive market environment brought out by market
competitors and technology convergence. Specifically, the study aimed at evaluating RBA’s
financial health over the last 5 years and establish a linkage of such a health to possible factors,
analyzing the completion in Rwandan media market and its impacts on RBA’s revenues in order
to identify strategies that could enable success to RBA Business today and in the future. The impact
of technology convergence was also explored vis-à-vis RBA revenues generation with the goal of
suggesting possible measures to maintain the performance. As technology is considered by many
scholars as an enabler of company’s performance and that this study was conducted during Covid-
19 outbreak, it was necessary to identify the required level of ICT integration into RBA activities
to mitigate probable shocks that may arise at undefined time such as Covid-19, and then nurture a
good financial position.
The study was inspired by three events that financially could harm RBA life. These include firstly
the high competition that emerged from the liberalization of media market in Rwanda in 2003
whereby RBA faces a big challenge as the formerly monopolistic national media market
environment is now shared among dozens of broadcasters, secondly the digital revolution that has
created technology convergence and which in turn is changing the media consumer behavior, but
also which is bringing new opportunities on the market such as advertising channels, and thirdly
the outbreak of Covid-19 that forced companies to close their doors or work with a very limited
number of resources. These events made the researcher to think of how companies like RBA could
align some key strategic elements in order to survive all those challenges. The research was
conducted within Rwanda Broadcasting Agency and the financial performance of RBA was
evaluated on the period between 2014 and 2019 to have an overview of company’s financial health
and thereby serve as the baseline to future strategies. For this purpose, a clear understanding of
financial performance was mandatory and secondary data were used. To collect information within
RBA, a questionnaire was designed and distributed to the respondents who constituted a sample
of 133 people in total and who were first explained why they were chosen and what was expected
from them. Quantitative and qualitative methods were combined to achieve the expected goal. A
questionnaire served as a tool and it comprised four main sections, including the financial health
of RBA within the last five years, Status of competition in Rwandan media market and its impact
on RBA revenues, understanding of technology use in RBA daily life and how it contributes to
financials and the effects of today’s technology convergence, and the good practices that RBA
should consider as strategic for a brighter future. The Financial health of RBA was analyzed on a
period of 5 years from 2014 up to 2019, and the net margin was the key ratio used to evaluate the
performance. Qualitative data were analyzed with an interpretative philosophy and deductive
approach while descriptive statistics were used to analyze quantitative data.
It was found that RBA financial health during the last five years was not bad but the reason behind
is the regular subsidies from Government. One could think of what the financial position should
be once the subsidies will be completely cut off. It was then found that RBA is on a high risk of
[ii]
market competition since there is no clear unique selling proposition nor quality function
deployment culture. No market survey was conducted since the existence of the company and it
was found that this could harm the financial health of the company. However, it was concluded
that Digital transformation could be a key to the future success of RBA while the good knowledge
of competitors, development of a clear unique selling proposition, and culture of quality function
deployment, getting the correct pricing, definition of entry minimization strategies, regular market
research, innovation and improved customer service were suggested as key strategies to
competitiveness. New innovative products such as DVD selling, syndication, VOD and IPTV
should be explored. The digital transformation will contribute to the shortening of processes and
saving of resources, while competition strategies will keep RBA revenues unshakable and
growing. RBA should therefore review its business model to incorporate strategies related to
market competition and IT infrastructure to enable the digitization of key areas including sales
values chain, management of transmission network, administrative routine processes and
document sharing such as contract files, in and out correspondences and other operational
documents.

[iii]
DECLARATION
I, Gedeon HAKIZIMANA, declare that this 19,707 words submission is my own work and that,
to the best of my Knowledge and belief, it contains no material previously published or written by
another person or material which to a substantial extent has been accepted for the qualification of
any other degree or diploma of a university or other institution of higher learning. Furthermore, I
declare that all sources cited or quoted are indicated and acknowledged by means of a
comprehensive and complete list of references.

Signed (Gedeon HAKIZIMANA)

[iv]
 DEDICATION

To Almighty God,

To my beloved wife Muhorakeye Marie Claire,

To my beloved son Ntwari Manzi Ndizihiwe Preston,

To my family and friends

To RBA family,

I dedicate this Research Project.

[v]
ACKNOWLEDGEMENT
To God our Creator and Our Savior:
Thank you for your boundless unconditional love and unlimited grace to me during the whole
process of my studies. Without your continuous protection upon me in all dimensions, I would not
have successfully completed this program.

To My Project Supervisor:
Thank you Professor Barry Kingsland for your invaluable guidance, patience, and tireless
assistance on all matters pertaining to this project as they led it to the success.
To UKTA, UR and ITU
Thank you for the successful joint coordination of eMCM program and for the good selection of
experienced professors who have objectively shared their experience

To RBA Management
Thank you for giving me the opportunity and all the required support to expand my knowledge. I
am indebted to Mr. Arthur Asiimwe, the Director General and Mrs., Claudine DeLucco
Uwanyirigira the Deputy Director General of RBA for their approval and support of the whole
process to my studies. Thank you Mrs. Domina Canisio for your good plan of capacity building.
My capacity was built to serve my nation. Thank you Mr. Sammy Gakuru and Mr. Ringendeki for
your timely action in payment to the program. I’ve never missed any single module.

To the Division Manager of Planning & Budget at RBA:

Thank you Mister Faustin Mukuralinda for your continuous support and good collaboration from
the beginning of the project to its end.

To All RBA Community:

Thank you for having accepted to participate in this project by accepting to share your views. Your
time and frank collaboration were highly appreciated.

To My beloved wife:
Thank you for your love and your endless care during the whole period of this project. The support
you rendered to me was great.

To My Parents, brothers and sitters:

I know your prayers were always with me. Thank you for your love.

To my Reader:
Thank you for taking the time to read this work. Financial performance is the objective of every
single enterprise but it is not free of charge. It must be worked for and sustained. It was my pleasure
to spend almost six month exploring some key factors to the financial health of Rwanda
Broadcasting Agency, hoping that this study could also serve as reference to further works.
[vi]
ACRONYMS AND ABBREVIATIONS
AT : Asset Turnover
CFI : Corporate Finance Institute
CMS : Contract Management System
Covid-19 : Coronavirus Disease of 2019
DTT : Digital Terrestrial Television
DVD : Digital Video Disc
EMCM : Online Master of Communications Management
ENG : Electronic News Gathering
FM : Frequency Modulation
ICT : Information and Communications Technology
IPTV : Internet Protocol Television
IT : Information Technology
ITU : International Telecommunication Union
NMS : Network Management System
NOC : Network Operations Center
NPM : Net Profit Margin
ORINFOR : Office Rwandais de l’Information
OSS : Operation Support Solution
PhD : Doctor of Philosophy
QFD : Quality Function Deployment
RBA : Rwanda Broadcasting Agency
ROA : Return of Assets
RURA : Rwanda Utilities Regulatory Authority
SLA : Service Level Agreement
SMS : Short Message Service
SNMP : Simple Network Management Protocol
TV : Television
TVR : Television Rwandaise
UKTA : United Kingdom Telecommunications Academy
UR : University of Rwanda
VOD : Video-On-Demand

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LIST OF FIGURES
Figure 1: Impact of ICT on Organization ....................................................................................... 9
Figure 2: Progressive emerging of broadcast media in Rwanda since 1961.........................................20
Figure 3: Research conceptual framework ....................................................................................21
Figure 4: Gender of respondents Source: Primary Data ...................................................................25
Figure 5: Trend of Respondents' age ............................................................................................27
Figure 6: Nationality of Respondents ...........................................................................................28
Figure 7: Trend of RBA's profitability on 5 years...........................................................................30
Figure 8: Trend of loss during 5 years ..........................................................................................30
Figure 9: Trend of revenues growth on 5 years period.....................................................................31
Figure 10: Impact of Covid-19 on RBA revenues...........................................................................31
Figure 11: Progressive emerging of broadcast media in Rwanda ......................................................32
Figure 12: End of RBA's monopoly by competition........................................................................33
Figure 13: Impact of competition on RBA adverts revenues ............................................................33
Figure 14: Perception of Respondents on the role of technology in business.......................................34
Figure 15: Relevance of used technology in RBA to boost financial performance ...............................34
Figure 16: Readiness of RBA Technology to deal with market competition .......................................35
Figure 17: The use social media in advertising can increase sales and revenues for RBA .....................35
Figure 18: Readiness of the current technology within RBA to mitigate Covid-19 challenges ...............36
Figure 19: Propositions on what should be added to the current technology within RBA to be enough
resilient to chocks like Covid-19 and deal with national competition.................................................37
Figure 20: Respondents position on how RBA can improve its financial health through technology.......37
Figure 21: Views of respondents on RBA's culture vis-à-vis audience and market survey.....................38
Figure 22: Views of respondents about RBA and Unique selling proposition .....................................39
Figure 23: Views of respondents about RBA and what the customer wants ........................................39
Figure 24: Accessibility of RBA broadcast programs on social media platforms ................................40
Figure 25: Suitable option for RBA to boost the profitability ...........................................................40
Figure 26: Areas of RBA life that need a quick transformation.........................................................41
Figure 27: What RBA should do to deal with convergence ..............................................................43

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LIST OF TABLES
Table 1: Prediction of failure basing on mean values ....................................................................... 8
Table 2: Evolution of broadcasting market in Rwanda ....................................................................19
Table 3: Online media houses in Rwanda .....................................................................................20
Table 4: Respondents Educational profile .....................................................................................26
Table 5: Respondents age group..................................................................................................26
Table 6: Professional Experience of Respondents ..........................................................................27
Table 7: Respondents' profession.................................................................................................28
Table 8: RBA’s financial indicators from 2014 to 2019...................................................................29
Table 9: RBA products list .........................................................................................................38
Table 10: Views about why and how the digital transformation should be done within RBA ................41
Table 11: Key strategies to handle competition ..............................................................................44

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TABLE OF CONTENTS
ABSTRACT .............................................................................................................................ii
DECLARATION .....................................................................................................................iv
DEDICATION ......................................................................................................................... v
ACKNOWLEDGEMENT.........................................................................................................vi
ACRONYMS AND ABBREVIATIONS .................................................................................... vii
LIST OF FIGURES................................................................................................................ viii
LIST OF TABLES ...................................................................................................................ix
TABLE OF CONTENTS .......................................................................................................... x
1. Introduction to the Study................................................................................................... 1
1.1. Background to the study................................................................................................ 1
1.2. Problem Statement ....................................................................................................... 2
1.3. Objectives of the Study ................................................................................................. 2
1.4. Research questions ....................................................................................................... 3
1.5. Significance of the Research.......................................................................................... 3
1.6. Scope of the Study ....................................................................................................... 4
1.7. Dissertation Layout ...................................................................................................... 4
2. Literature Review ............................................................................................................... 6
2.1. Financial performance in general ........................................................................................ 6
2.2. Financial performance and Information Technology .............................................................. 8
2.3. Financial Performance of ICT firms ...................................................................................10
2.4. Financial performance of Broadcasting Services companies ...................................................10
2.5. Technology convergence..................................................................................................13
2.6. Competition ...................................................................................................................17
2.7. About competition in Rwandan broadcasting sector ..............................................................19
2.8. Conceptual framework .....................................................................................................20
3. Research Methodology .......................................................................................................23
4. Findings/Results/Data Analysis............................................................................................25
4.1. Profile of Respondents .................................................................................................25
4.1.1. Gender characteristics...........................................................................................25
4.1.2. Respondents’ Level of Education ...........................................................................26
4.1.3. Age groups .........................................................................................................26
4.1.4. Experience in RBA ..............................................................................................27
4.1.5. Profession/Department of Respondents....................................................................27
4.1.6 Nationality of Respondents ..........................................................................................28
4.2. Evaluation of RBA financial health................................................................................29

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 4.3. Evaluation of competition growth in Rwanda Media Market ..............................................32
4.4. Technology used in RBA daily activities and its impact on financial health ..........................33
4.5. RBA Business Strategy................................................................................................37
5. Data discussion /Interpretation .............................................................................................45
6. Conclusion:.......................................................................................................................47
7. Recommendations..............................................................................................................50
8. References ........................................................................................................................51
9. Appendices .......................................................................................................................58
Appendix 1 ..............................................................................................................................58
Appendix 2 ..........................................................................................................................62
Appendix 3 ..........................................................................................................................64
Appendix 4 ..........................................................................................................................70

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 1. Introduction to the Study
1.1. Background to the study
After the liberalization of Rwanda media market in 2002, multiple media outlets have emerged
contributing to a high market competition compared to the period before. The growth has been so
significant, from 1radio station in 1962 to 34 radio stations in 2020. Besides, with the digital
migration process as recommended by ITU to all state members, the deployment of digital TV
transmission infrastructure in Rwanda has induced the explosion of new entrant into the sector,
increasing the number of TV stations from 1 in 2002 to 18 TV stations in 2020. For RBA as the
former unique beneficiary of Rwandan media market, this emerging competition has constituted a
real challenge for the financial health maintenance, since the existing small market was
unprecedentedly shared among dozens of operators who have already entered the field.
Apart from the high national emerging competition, doing ICT business in a rapid evolving
technology world of today requires to have clear and focused strategic orientations as the
convergence is changing the ways how people used to consume some ICT Products. Broadcasting
consumers are changing their behavior and with a smart phone, you can listen to a multitude of
radio stations’ programs and watch your favorite TV show. The people who used to watch
television have found new ways to do so in an industry that is adapted to the needs of its customers.
The financial performance of RBA is thus threatened by both high competition and rapid changing
technology.
Moreover, considering that this study was to focus on the financial condition of RBA on the period
from 2014 to 2019 in order to identify appropriate factors to a good financial performance in the
future, it has been mandatory to overview the economic impact of Covid-19 on the institution,
since ignoring it should result in an incomplete strategic orientation. Therefore, an overview of the
RBA’s financial situation for the year 2019/2020 was added to the analysis. In fact, the worldwide
outbreak of Covid-19 taught companies that there is more to do in order to be resilient to the shocks
that may arise at an undefined time. The global lockdown has suddenly forced companies to shift
from their usual way of working to a new mode of running their daily activities, mostly forced to
work remotely. More and more, enterprises have missed and will continue to miss their financial
targets because of supply chain disruptions and dampened customer demand. The pandemic has
really exposed the vulnerability of companies in terms of business continuity readiness and then
financial resilience. Only companies whose businesses are web-enabled have resisted the
pandemic challenges at a certain level, while others simply bowed. RBA was not an exception.
With a financial target of 13% increment with regard to the previous year, RBA could only achieve
5% (RBA Financial data), mostly because of Covid 19 challenges. Sales executives was
constrained to work from home and as the institution did not have a web-enabled business portal
through which sales activities could continue, sales transactions regressed considerably, resulting
in remarkable loss of revenues. In fact, for enterprises, the resistance to Covid 19 challenges
required a set of technology readiness and in a very quick way the pandemic has exposed how
vulnerable companies were. More cases like Covid-19 may happen again and businesses should
get prepared to such probability by defining and aligning appropriate solutions not only to resist
to the possible similar challenges in the future, but also to maximize company productivity.
Key strategic elements that can help broadcasting companies like RBA to survive the very rapid
competition growth as observed on Rwandan media market while coping with the technology
convergence in one hand and get ready to probable shocks in the other hand by rethinking how
their business can achieve a satisfactory financial performance and maintain that financial health
for a resilient future is mandatory for today’s companies. It is within this context that this study
was designed.
1.2. Problem Statement

The growth in creation of private radio-TV stations in Rwanda has been welcomed by the public
since this resulted into a sound competition in media market sector. However, for RBA (former
ORINFOR), this was the beginning of financial performance struggles since the institution had so
long enjoyed the market monopoly since its creation in 1962 that it was not familiar with the
competition. As of today, there are 34 FM stations operation in Rwanda, 18 TV stations, 23 online
media houses and 30 print media houses (RURA, 2019). This growth constitutes a high
competition to RBA in terms of market share on the local market environment.
In addition, the broadcast end-consumers are no longer forced to listen or watch transmitted
programs through traditional channels. Broadband internet connectivity exist almost everywhere
and the flourishing of social media platforms has opened up very profitable opportunities in terms
of audience outreach. Companies can advertise their businesses through social media pages and
the mobility of connection makes it more effective. In particular, the “three-screen convergence”
(mobile, TV and computer) constitutes also a big challenge to the traditional way of consuming
broadcast services as TV viewing and radio listening habits have shifted, meaning that the
traditional broadcast ecosystem (content production, servicing and distribution) and the subsidy
business models through pay models have to change in order for the ecosystem to survive
(Waterman et al. 2012). With such an environment, without proper strategies, RBA can financially
be kicked out either through national competition or by lagging behind in technology integration.
Lastly but not leastly, Covid-19 came to prove that there were still some business areas that needed
more attention to be resilient enough, such as business-enabled technology readiness in RBA. If a
sudden incident like Covid-19 was to happen, companies should get ready for them to stay on stage
or if not, to be kicked out. It is understandable that everyone could wonder if there could be a way
through which firms are to resist the shocks as in the context of Rwanda Broadcasting Agency in
today’s competitive and converging environment. This study aimed at identifying possible
strategic factors to keep ICT businesses growing in general, and to maintain RBA financial health
in good position despite the challenging market conditions in particular.

1.3. Objectives of the Study

The general objective of this research was to investigate the key factors that positively contribute
to the financial performance of ICT businesses and help to maintain that financial health in an
increasingly competitive market environment brought out by market competitors and technology
convergence in today’s business world. Specifically, this study aimed at:
i) Discussing RBA’s financial health over the last 5 years and establish a linkage of such a
health to possible factors,
ii) Highlighting and evaluating the rapid growth of competition in Rwandan media market in
order to establish possible strategies towards a successful RBA Business case in terms of
revenues today and in the future,
[2]
iii) Evaluating the impact of technology convergence in today’s ICT business and propose
possible strategic measures key to RBA financial performance in such an environment.
iv) Identifying the required level of ICT integration into corporate daily activities to mitigate
probable shocks that may arise at undefined time such as Covid-19, and then maintain
firms’ financial health in good position.

1.4. Research questions

The research was guided by the following main questions:
i) What is the financial health (performance) of RBA during the last 5 years (from 2014 to
2019)?
ii) Does the current competition in Rwanda media market constitute a challenge to Rwanda
Broadcasting Agency in terms of financial sustainability?
iii) Can we estimate that technology convergence appears to be like a new mode of competition
to traditional broadcasting channels and then a challenge to the financial performance
of Rwanda Broadcasting Agency? If yes, what should broadcasters like RBA should
to today to deal with that challenge?
iv) Is there any strategy that can be adopted to mitigate the impact that can result from shocks
similar to Covid-19 on the continuity of RBA business today and in the future?

v) It was proved that the use of ICTs had contributed to the financial performance of RBA in
the past. If this is true, can we consider that the extent to which Rwanda Broadcasting
Agency apply new Information and Communication Technologies in daily activities is
as enough as it should be to maximize company’s financial sustainability?

vi) What are the strategic actions that RBA should consider as key to its financial health in the
context of Rwandan market and technology convergence?

1.5. Significance of the Research

Apart from the global technology convergence which challenges all ICT companies in their
business today, since its promulgation in 2013, RBA has suddenly known an increasing
competition by the establishment of many private radio and TV stations. The company that had
been so long working in a monopolistic market environment had to switch to a shared market
system, with a probable impact on the revenues. In addition, the outbreak of Covid-19 has shown
how companies are vulnerable in terms of technology readiness to maintain their business
activities. Only businesses that were web-enabled could continue their business activities during
the lockdown period, and this was a global situation. Revenues decreased in RBA due to the
pandemic and without having a clear strategic position about competition and shocks, companies
would in general operate at high risk and RBA as an economic unit was not an exception.
Thereby, a new way of doing business for effectiveness and efficient output even in distress times
was needed. Otherwise, RBA should find itself lagging behind other stations and missing to its
mission as a result. This study purposefully designed to help RBA Senior Management to rethink

[3]
and align appropriate strategic measures to deal with the high completion observed on the market
while effectively and efficiently integrating the use of Information and communication
technologies to acquire business readiness in a rapid evolving technological world. It was also
hoped that this study should inspire any other business in the same sector as RBA to strategically
plan for financial health.
1.6. Scope of the Study
The focus of this study was limited in content, time and geography. By content, the research was
in general focused on factors that can positively contribute to the financial performance of ICT
companies in an emerging competitive environment and global technology converged world, and
Rwanda Broadcasting Agency, the national broadcaster of Rwanda with its headquarters located
in Kacyiru Sector, Gasabo district in Kigali city was the target of research. The financial
performance of RBA was evaluated on the period between 2014 and 2019 to inform key strategies
that should be aligned vis-à-vis the national competition and global technology convergence. More
attention was put to the use of information technology to enable business continuity and mitigate
risks inherent to shocks like Covid-19 aiming at maintaining a healthier financial position.

1.7. Dissertation Layout

This dissertation “Identification of Key Strategic Factors to the Financial Performance of ICT
Companies in an Emerging Competitive Environment and Global Technology Converged World.
Case of Rwanda Broadcasting Agency-RBA” is made of seven (7) chapters. The first chapter
provides the contextual background to the study, the location of the study and Key participants.
The reasons that led the researcher to conduct it, its importance as well as its significance are
discussed. The objectives and the intended benefits to RBA are also discussed in this chapter,
which also highlight the outbreak of Covid-19 as a special incident that made this research
necessary. The second chapter is dedicated to the literature review. Various works about financial
performance of firms in general and financial performance of media services in particular are
compiled and presented here. Views about competition in media market environment as
established by previous scholars are hereto presented. A particularity is given to national
competition in media market. Technology convergence is also approached in this chapter in a
general way first and in a media market related view in particular. The combination of its
knowledge with market competition, financial performance and Impact of IT integration in
business process builds up a bridge to the understanding of the core theme of this research. The
methodology that has been used during this research is presented in chapter three, and various
techniques and methods are indicated, including how data were collected through a questionnaire
and analyzed both qualitatively and quantitatively as the research comprised both kinds of data.
The fourth chapter is dedicated to the presentation of findings, as collected from different
respondents who constituted the sample population. In total 133 respondents presented their views
about various questions that were asked focusing mainly four domains including the financial
health of RBA during the last five years, the level of technology integration in daily RBA business
activities, the competition on Rwandan media market and the impact of technology convergence
on companies like RBA in today’s business environment. Considering that the study was
conducted during the outbreak of Covid-19, its impact is also presented in this chapter as per the
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stated conceptual framework. The results are discussed and interpreted in chapter five (5). This
chapter (5) concentrates on the researcher’s analysis of findings and this analysis was done in the
light of defined objectives. Conclusion to the findings is made and presented in chapter 6, while
the seventh chapter is dedicated to the recommendations. At the end of the dissertation, a list of
references used in this study is captured as well as supplementary information to the dissertation
such as questionnaire, presented as points 8 and 9 respectively, numbered only for the
organizational purpose.

[5]
2. Literature Review
As research base, literature on financial performance in general and financial performance of
media firms in particular was consistently examined in order to have a clear view on key
influencing elements. A good number of works about competition was also explored to elaborate
on its impact on financial health of companies. Considering the proved impact of Information
Technology on firms’ performance, a number of literature was reviewed to get acquainted with the
position of IT usage in today’s performance process. The issue of convergence in current market
environment in the domain of multimedia and ICT was also explored through works of various
researchers. As Rwanda Broadcasting Agency constituted the target of this study, it was imperative
to review some few existing works about RBA and its financial health as elaborated by previous
scholars. This chapter is a compilation of such works.

Firm performance is very essential to management as it reflects the achievement of individual or

a group of individuals in an organization linked to its authority and responsibilty in achieving the
goal legally while complying with the morale and ethics (Yassin Almajali, et.al, 2005).
Performance is then function of the capability of a group to gain and manage the resources in
several different ways to nurture a competitive advantage. Performance measurement are the life
blood of economic units (Benjalux, 2006), since without them decisions are made in vacuum. For
firms, financial performance measurement is one of the important actions. According to Hass,
business performance measurements are used as indicators to evaluate the success of economic
units in regard to the defined strategies, objectives and critical success dynamics (Hass et al. 2005).
As the study focused on factors of financial performance of an ICT company, a review of
literatures on technology impact on companies’ financial health were reviewed. The parts to follow
will mainly relate to financial performance in general and to ICT companies and their performance
in terms of financial health in particular.

2.1. Financial performance in general

A substantial number of studies about performance issue at microeconomic level demonstrates the
particular importance of financial management aspects on the improvement of which depend the
obtained results and company’s competitiveness. (Camelia Burja, 2011). The information about
company performance, especially about its profitability is useful in substantiating managerial
decisions regarding potential changes in the economic resources that the company will be able to
control in the future, the objective of companies being that of achieving superior economic results
that will increase the company’s competitiveness and will satisfy the shareholders ‘interest.
(Camelia Burja1, 2011). There is no doubt about how performance measures are crucial element
in evaluating firms’ success in regard to the achievement of its strategic objectives (Crabtree &
DeBusk, 2008).
Generally, financial performance is defined as a physical indicator of how much a given company
is able to generate profit or revenues This health is reflected in financial statements mainly
consisting of Balance sheets, Income, Cash Flow and Changes in capital as one of tools that can
serve to evaluate the financial status of the company at a certain period (Didin Fatihudin et al,
[6]
2018). At microeconomic level, performance is considered as the direct effect of management
output on various financial resources and of their efficient use within operations, investment and
financing activities. A special attention should then be given to the proper foundation of
managerial decisions in order to optimize economic results (Camelia Burja, 2011). These
decisions should base on a set of information about the evolution of all types of activities within
the company. Annual financial statements are a summarized picture of the company’s financial
position and its performance. These turn into the main source of information that can allow the
qualitative analysis of how resources are used during the process of creating value. For a given
company to run on a long-term performance way, it is mandatory to develop, implement and
maintain appropriate strategies, measures and coherent policies from economic and financial point
of view, resulted from a good knowledge of internal and external specific conditions in which the
company acts. According to Camelia, The efficiency of managerial decision shall be reflected in
the ability of identifying those elements that productively put together could lead to the increase
of company’s results and performance.

In today’s increasingly competitive market environment, an accurate and appropriate evaluation

of financial performance bears considerable significance for a firm that targets to successfully
maintain her market position and protect their market shares against potential risks in the future
(Berna (Kiran) Bulgurcu, 2012). In order to be able to preserve a steady and competitive position
in the market, to provide inputs for the management, to make important strategic decisions and to
achieve their economic goals, a company is required to continuously analyze and observe their
financial situation which reflects the financial health. A principal factor of affective financial
management consists of financial situation knowledge. For this purpose, companies use financial
analysis by which enterprise will be proficient enough to prevent the crunch, which would lead to
remediation or even bankruptcy (Chitsimran et.al, 2018).

For the purpose of getting information about company’s performance, various methods are used
but the most popular is the use of financial ratios. Financial ratios can play an important part in
evaluating the performance and financial condition of a firm. Ratios measure the relationship
between two or more components of financial statements and they are used most effectively when
results over several periods are compared. This exercise allows companies to follow their
performance over time and uncover signs of trouble.
In the concept of ratio analysis, a company is considered as a reservoir of liquid assets, which are
supplied by inflows and drained by outflows. The reservoir serves as a cushion or buffer against
variations in the flows. The solvency of the company can then be defined in terms of the probability
that the reservoir will be exhausted, at which point the company will be unable to pay its
obligations as they mature, which is simply known as failure.
In drawing the relationship between the liquid-assets-flows model and ratios, four notions are
important. The first is the size of the reservoir itself. The second is the net liquid-asset flow from
operations, which is used to measure the net amount of liquid assets supplied to or drained from
the reservoir by current operations. The third concept is the debt held by the firm and this is one
measure of the potential drain upon the reservoir. The fourth is the fund expenditure for operations
and it is the amount of liquid assets drained from the reservoir by operating expenditures.
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Given these concepts, four ceteris paribus propositions can be itemized.
1) The larger the reservoir, the smaller the probability of failure
2) The larger the net liquid-asset flow from operations (i.e. cash flow), the smaller the
probability of failure
3) The larger the amount of debt held, the greater the probability of failure
4) The larger the fund expenditures for operations, the greater the probability of failure.

These four propositions can be used to form predictions about the mean values of most used
financial ratios. These ratios are cash flow to total debt, net income to total assets, total debt to
total assets, working capital to total assets, current ratios and the non-credit interval (William H.
Beaver, 1966). The predictions appear in the table below:
Table 1: Prediction of failure basing on mean values

Ratio Prediction
Cash flow to total debt Not failed> Failed
Net income to total assets Not failed > Failed
Total debt to total assets Failed > Not failed
Working capital to total assets Not failed > Failed
Current ratios Not failed > failed
Non-credit interval Not failed >failed

Source: Financial Ratios as Predictors of Failure, William H. Beaver, 1966.

From the table above, it is clear that any company should strive to be in a non-failed position.
Firms should make sure that always their reservoir is larger and that the net liquid-asset flow from
operations (i.e. cash flow) is always larger. This will create a very low probability of failure.

2.2. Financial performance and Information Technology

In today’s context, it is difficult to talk about financial performance of organizations without
recalling the impact of ICT in the whole process since studies indicate that effective and efficient
use of IT is a key factor differentiating successful firms from their less successful counterparts
(Anandhi S. Bharadwaj, 2000). This has resulted in the fact that in recent literatures, the advance
and use of Information technology (IT) have been thematic (Nada R. Sanders et al, 2011). The
usage of IT has been viewed as an enabler of firms’ collaboration at internal and external level,
making it the foundation of supply chain management. Undoubtedly, many firms have
strengthened their core competencies by using information technology as a tool. (Haewon Lee
et.al, 2016). Therefore, it is believed that when company collaboration is combined with
appropriate information sharing, are in turn expected to improve company’s performance. This
conviction was proved by the fact that firm IT capability has a direct impact on internal and
external collaboration as well as firm performance. This has important implications for executives
as they evaluate investments in information technologies in a time where may researchers state
that IT and the internet in particular have the capability of creating a competitive advantage and
boost firm performance and competitiveness (Namasivayam, Enz, & Siguaw, 2000); Porter, 2001;
Sirirak, Islam, Khang, 2011).

[8]
However, the benefits/advantages of ICT materialize only after a period of adoption and managers
should have that information even though it was proved that time lagging in full realization is for
some categories of investment. (Haewon Lee et.al, 2016). Generally, the benefits depend on the
type of business, internal changes (e.g. re-engineering process, personnel retraining) and suppliers-
customers interaction. The benefits can be classified in 4 groups, including performance, growth,
firm expansion and creation of new products (Domenico Consoli, 2012). It was proved that ICT
investments should be aligned with internal capabilities and organizational processes for best
performance.

PERFORMANCE GROWTH
- Efficiency, Effectiveness, and - Productivity growth
competitiveness - Strategic growth
- Innovative business - Sales increase
- Intangible benefits

Impact of
ICT
EXPANSION NEW PRODUCTS

- Organization expansion - New Products/services

- Supply chain improvements - Product quality
- International communication - Customer satisfaction

Figure 1: Impact of ICT on Organization

(Source: Literature analysis on determinant factors and the impact of ICT in SMEs, Domenico Consoli,
2012)
The impact of IT on company’s performance remains also valid for Media firms as it was proved
by Ndayambaje that information and communication technology applications have multiple
benefits on RBA’s financial performance (Faustin Ndayambaje, 2014). According to Ndayambaje,
ICT applications had various benefits on the financial performance of Rwanda Broadcasting
Agency as materialized in the speed, accuracy and quality with which things were done within the
company. The identified benefits included the increase of sales, activities speed, user-friendliness
of the system and the reduction in operational costs. The researcher confirmed therefore that all
the attributes of performance within RBA were directly linked to the application of information
and communication technology.
However, as for many firms in the world, the outbreak of Covid 19 has shown that some important
gaps in business continuity readiness existed whereby the drop in revenues induced by the
pandemic was larger for the firms that were more exposed to the covid-19 through their customer
locations, (Wenzhi Ding, 2020), RBA vulnerability was also exposed. While ready services and
utilities were to be kept running even during the pandemic (Richard Baldwin et.al, 2020), it has
been noticed that during the lockdown period, it was impossible for RBA sales executives to
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approach the clients for business negotiations due to their physical location. Considering that the
big portion of RBA revenues comes from advertisers who normally are interested by the sales
executives, the pandemic has highly affected RBA revenues and then its financial performance.
This research was therefore designed to investigate the causes of that vulnerability in the eyes of
technology readiness in order to identify appropriate solutions which can positively impact on
financial performance irrespectively of unforeseen shocks.

2.3. Financial Performance of ICT firms

In ICT market environment, product development is considered as a crucial factor that determines
success or failure. In a competitive environment, the success and sustainability of any companies
is determined by its product development strategy (Arnold, 2017). Therefore, it is necessary for
ICT firms to master the product development strategies that promotes their product and service
portfolios that are able to seizure a wider market and thus make more profits. In other words, the
financial performance of ICT companies is linked to the strategic product development in one hand
and to the company’s pursuit of coherent technology strategy aiming at articulating its plans to
develop, acquire, and deploy technological resources to achieve superior financial performance
(Shaker A. Zahra, 1996). By these strategies, companies are set to choose among being
technological pioneer or follower. These choices must indicate the level of Research and
development to be conducted and the emphasis on it as well as the intended offensive or defensive
use of technology
In addition to the focus on strategies to be technological pioneer, the company image plays an
important role in its performance while brand awareness is the backbone of survival strategy
(Megha Gaste et.al, 2017). To keep a continuous reputed image, ICT companies should focus on
new technology, quality function deployment by considering customers’ needs and while the staff
motivation must also be kept as higher as possible. However, these strategies may not be sufficient
enough in terms of performance readiness considering that companies are under a high pressure of
being highly competitive to stay on the stage. They need intelligent tools to gain a competitive
advantage while financial analysts need to do regular tests in order to gain required information
about how their companies perform financially compared to their competitor, what they are good
at, who the major competitors are, etc. (Karlsson et al., 2009).

2.4. Financial performance of Broadcasting Services companies

Even though media market is globally identified in the ICT sector, it is of paramount importance
to have a particular understanding of what drives media business, today’s challenges and
opportunities in order to have a base of what broadcasting companies should do in the future to
foster their financial performance.
Media firms are creators that acquire and combine resources to create to build a product or service
to be purchased on the market. To understand commercial and media competitive issues, the
characteristics of media products and services, their marketing philosophy, their production and
distribution methods and the value created by these processes constitute the fundamental elements
(Robert G. Picard, 2005).

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Even if they involve substantial artistic endeavor, media products are also subject to basic
economic, financial, and managerial laws and pressure as for all other products. However, they
differ from other industries in a good number of points (Doyle, 2002). They differ from others in
supply and demand, in the nature of industry and the set of activities required to impact on media
industry business dynamics.
Basically, media firms are different from other firms and industries because media products are a
result of creative work based on information, ideas, literacy and artistic effort (Wicke, 1990, Caves,
2004). Media products are worth of special benefits from patents and other related rights that are
not extended to other types of products.
Compared to other firms and industries, media firms are characterized by an increasing visibility
to consumers more than those in other businesses since they are a noticeable part of day-to- day
life and because individuals involved often have celebrity status and receive great attention.
Moreover, since social, political and cultural goals are pursued through media policies media are
extremely influenced by the public policy and regulation while they rely upon publicly controlled
spaces such as radio spectrum, public right-of-ways more than any other industry (Robert G.
Picard, 2005). Only the appreciation of these differences with other industries helps in determining
factors and interactions constituting the uniqueness of media markets. The following parts discuss
on broadcasting media market as one of the industry and some works about financial performance
in the sector.
As one of media industry, broadcasting has many revenues streams. The most known is advertising
but beyond advertising revenues, broadcasters should look at alternative revenue streams such as
syndication, home video, home audio, and new media. During the past decade, home video which
took a new life since the introduction of the DVD box set and continued with the inception of Blu-
ray discs and VOD (Video on Demand) has constituted an important cash inflow. Broadcasters
should have a clear understanding of all the factors that determine each type of revenue and the
relationship between each other. (Alejandra M. Zannier Acha, July 2012).

The main goal being the maximization of profit without ignoring the social side of media
responsibilty, managers must find the approach to maximize revenue and minimize costs. In the
pursuit of maximizing profits at company level, people responsible of programming the content
need to perform a complex cost-benefit analysis of the potential revenue and costs associated to a
broadcast talk/show throughout the broadcast value chain. (Alejandra M. Zannier Acha, July 2012)
In the view of some authors, performance is a certain level of best results obtained by an
organization, which is closely related to the concepts of competitiveness and competitive
advantage. It is recognized that a highly performing company should pay special attention to the
key elements including the resources of production, work processes, organizational side, as well
as the beneficiaries of their products, in other words the customers. (Theory of AD Little).

The financial performance of media is usually measured by revenue, profits, and financial ratios,
such as return on sales, operating profits, and assets turnover (Miller & Shamise, 1996). Net profit
margin (NPM) is revenue divided by net income. NPM measures the capability of a firm to control
its costs and indicates the media’s strategic management issues, such as its pricing strategy, or the
way that media firms compete in a market. Asset Turnover (AT) is net income divided by average
[11]
total assets. The AT is used to measure how efficiently a media firm generates sale revenues from
its resource bases. Return of Assets (ROA) is a company's net income divided by its average of
total assets. ROA measures a firm’s efficiency in utilizing its assets (Soontae, Hyun Seung &
Simon, 2006). ROA considers net income more, and AT considers revenue (Morgan & Rego,
2009). Scholars have considered that the variable of cash flow is more reliable than reported profits
(Morgan et.al, 2009), because it is less dependent on a firms’ accounting practices (Sloan, 1996;
Dechow et.al, 1998). Cash flow is used to measure the quality of a firm’s income and whether the
company is positive in terms of its long-term financial obligations. Morgan and Rego (2009) also
used the variability of cash flow to measure the stability of cash flows. The variability of cash flow
is the coefficient of variation of the previous five-year net operating cash flows. (Fengyao Luo
B.A., 2015)
According to JB Maverick, for a company to survive in the long run, it must attain and maintain
the profitability. In fact, even if liquidity, basic solvency and operating efficiency are all important
factors to be considered in the evaluation of company financial health, the best metric to evaluate
the company profitability is net margin, which is the ratio of profits to total revenues. A larger net
margin reflects a greater margin of financial safety which indicates that a given company is in a
better financial position to commit capital to growth and expansion. (J.B. Maverick, 2020).

In one hand, broadcast stations’ profit is determined by the conduct of the company in the market.
Leftwich (1984) defined the profit as the difference between the firm’s total receipts or revenue
and its total costs at each possible output level, while Vernon (1972) defined the profit as the
residual excess of revenues over the opportunity costs of resources used in generating those
revenues. Picard (1989) characterized pure profit as the return that exceeds both the monetary and
non-monetary costs. Some scholars suggested that profit of broadcasting industry may be related
to the number of listeners attracted on the market. The higher is the audience, the more is the
station to generate more incomes. However, this argument was discredited by Steiner (1952) in his
study of radio industry prior to television invasion. He demonstrated that audience maximization
may not necessarily coincide with profit maximization. In contrast, he indicated that the content
plays a very important role in attracting advertisers. He added that in a capitalist market structure,
companies should concentrate on generating revenues to offset expenses in order to register a
profit. In this way, the incentive of broadcast companies depends on the maximization of available
revenue, not audience.
Considering that performance is a result obtained mainly from a good management, the economic
performance of broadcasting service is the output of effective financial management and relate to
achieving higher levels as compared to targets, competition and the situation in previous years of
measurable results In the case of public broadcaster, a special contribution to the company
performance is held by the way in which financial returns are allocated and committed to carry out
other forms of expenditure (Budacia Elisabeta Andreea et.al, 2009).
Elisabeta has concluded that performance in the public media service is a level of best results
achieved in a specific context in regard to the defined objectives, current competition, expenses
management, work organization, involving and motivating staff, technical characteristics and the
management team. Work organization must be done to define the expected performance from each
service, to delimit and dimension the accuracy of the process in order to ensure correspondence

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between the objectives and the process and eliminate a number of inherent failures in conducting
any activity.
In the other hand, competition is an important factor in determining the results of performance of
a broadcast station, especially in a saturated and targeted market environment. The way
expenditure is handled is a decisive factor in determining the level of performance of public
stations, as well as the way financial resources are set and achieved under the goals of meeting the
expectations of the public. Therefore, the staff must be involved in conducting the activities
designed to achieve the objectives and expectations arising from the mandate of public service
media. They must have a certain level of performance that relies on quality of service (Fengyao
Luo B.A., 2015)

According to FengyaoLuo, technical infrastructure is a condition to achieve expected performance,

resulting in public accessibility to the offer of a public broadcaster. Ion Bucheru, stated that the
broadcast phenomenon does not deal explicitly with the concept of performance of broadcast
services. Rather, he points out the notion that there is a series of elements that determine that
performance, among which it is mentioned the characteristics of the broadcast message, the
functions of the message, the programming of shows, the type of shows, the adequacy of the
information, etc. In the same angle, Ion Stavre sustains the idea that the notion of performance
should be a result of the quality of broadcast programs, the respective quality depending on a series
of factors including the personnel, the technique, the signal quality and other factors as previously
mentioned (Ion Stavre, 2004).
We can thus conclude that performance in broadcasting service is a level of best results achieved
in a specific context defined specifically by the fixed goals, current competition, expenditure
management work organization, staff engagement, technical infrastructure and the ability of the
management team. However, media industries being today infused by digital technologies and
converging platforms, this environment inspires the necessity of developing attractive new
services, competing multilaterally instead of relying on traditional business models. Online
communities, Voice over Internet Protocol networks, Internet with its broadband distribution
constitute an attractive sector in which to orient the strategic focus. (Sylvia M. Chan-Olmsted,
2006)

2.5. Technology convergence

Since the last two decades up to now, the fast development of new communication technologies
including the internet, personal computer and portable electronic devices have powerful influences
on people’s life especially on their usual consuming behavior (Sheng Zhang, 2009).This is known
as digital revolution which is transforming media and communications industry worldwide (Gillian
Doyle, 2002), making consumer’s lives easier while empowering them through more choices on
merchandise (Sheng Zhang, 2009).

In fact, technology is the key driver of this tremendous achievement through the results of
digitalization. The development can be explored according to three different characteristics: the
signal digitization and bandwidth, the increase of data production cheapness and the integration of
transmission networks. The digitization is a technological phenomenon by means of which it is
[13]
possible to translate data, sounds and images into a single format, the digital binary format.
Information is transformed into a binary sequence of 1 and 0 numbers, or bytes. Through a series
of successive procedures designed to apply numerical algorithm, the analogue signal is
transformed into a digital signal unencumbered by any spatial or temporary redundancy. As a
result, sounds, images, texts and graphics are identical to each other since they have been translated
into a digital signal. Consequently, they can be combined, stored, handled and efficiently quickly
transmitted over the same network and therefore received by the same device. That is convergence.
The revolution has then evolved to the level of merging industry boundaries which is known as
convergence. This digital convergence is actively shaping the society, technology and the media
for the next millennium (John Vince et.al, 1999). It has enabled areas such as home banking and
shopping over the internet, worldwide web access over mobile phone networks and new television
systems such as web TV which combine online services with television. The EU green paper
defined convergence as the ability of different network platforms to carry essentially similar kinds
of services, or the coming together of consumer devices such as the telephone, television and
personal computer (Anders Fagerjord et.al, 2007).

According to Michael, the term convergence is an often used but rarely defined concept. He
indicated that some describe the phenomenon of convergence as the creation of interactions,
disappearance of industry borders, integration or overlapping of markets. He pointed out that in
some cases technological changes, customer focused and corporate innovations are moving closer
together the services that were originally different (Michael Dowling et.al, 2006). This is what we
are observing every day. The same author defined convergence in a strategic management context
by distinguishing the dimension of convergence and by analyzing the implications for the industry
structure. By convergence, the rules of the game, the reference competitive scenario, the viwers
habits, and offering modalities are all undergoing big change . At present, new business models
are available to networks coupled with endless opportunity for development and growth within
this increasingly facinating and complex business (Margherita Pagani, 2002). These statements
lead to the fact that convergence is not just about technology. It is also about services and the new
ways of doing business and of interacting with society. It therefore represents the “information
Revolution’ (John Vince et.al, 1999). As of the time of this research, technology convergence is
realized and demonstrates a rapid dynamic trend towards a maturity phase. Convergence is already
a reality within the ICT and high-tech industries themselves, between them and, last but not least,
among them and other industries at multiple levels. Considering the challenges and opportunities
brought on the market by this technological revolution, it is of paramount importance to grasp the
convergence in its all possible dimensions as of today, especially in the context of media market as it is the
central theme of this study. As identified by the Organization for Economic Co-operation and
Development, convergence draws to a set of dimensions. This multidimensional aspect of the convergence
phenomenon was also discussed by Anders Fagerjord & Tanja Storsul and they have identified six leading
interpretations of media convergence including the convergence of networks; terminals; services; rhetoric’s
; markets; and regulatory regimes. Ramjee Prasad in Future Trends and Challenges of ICT Standardization
(2010), has put the interpretation of convergence phenomenon as discussed below:

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 - Network convergence: this type of convergence is driven by the shift to the IP-based
broadband network. It includes fixed-mobile convergence and the “three-screen
convergence” (mobile, TV and computer),

- Service convergence: which allows the access to web-based applications and the provision
of traditional and new value-added services from a multiplicity of devices, thanks to the
network convergence and the existence of innovative digital handsets.

- Industry/market convergence that brings together in the same field different industries such
as information technology, telecommunication and media, previously operating in separate
markets.

- Legislative, institutional and regulatory convergence: this is a cooperation that is taking

place between broadcasting and telecommunications regulation. Policy makers are
considering converged regulation to address content or services independently from the
networks over which they are provided, commonly known as technology neutral
regulation.

- Device convergence: today, most devices include a microprocessor, a screen, a storage,

input device and some kind of network connection. Increasingly they provide multiple
communication functions and applications.

- Converged user experience: unique interface between end-users and telecommunications,

new media and computer technologies

In the perspective of media markets, broadcasting sector is in a phase of change, with new
technologies, such that new contestant companies are facing an increased competition, as far as
digital revolution is active. For instance, the Internet Protocol Television (IPTV) constitutes one
emerging stream of broadcasting while the competitive gaming (eSports) scenes for example
resting upon the same technology (TM Scholz, 2011).This has led to the fact that media companies
are being confronted with market changes that are destabilizing previously successful mature
markets, undermining long-term relationship with audiences and advertisers, and thus threatening
the sustainability of their business models. The pace of these changes is extraordinary to the level
of forcing broadcasting managers, shareholders and employees to scramble to comprehend those
changes by developing appropriate strategic responses while reorganizing their activities (Robert
G. Picard, 2004). Convergence of broadcasting, telecommunications and computer technology is
a real issue in today’s ICT business environment. No broadcaster can remain untouched by the
changes that are brought out by digital convergence. However, technologies which threaten also
bring a number of opportunities. As threats to broadcast traditional business model, emerge from
the event of broadband internet the opportunities that arise from the flourishing of communication
platforms working under Internet protocol. The majority recognize that the architecture and
business models of this industry are being increasingly transformed by digitization and
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convergence on many levels is noticed. In fact, digitization and convergence have led to a
remarkable disruption for the traditional broadcasting value chain in a way that innovative players
from adjacent IT industries have entered the market by offering services that are generally cheaper
and more accessible. In addition, Broadcast consumption habit have changed, meaning that the
whole broadcast ecosystem has to change in order to cope with the evolving market environment.
(Paul C. Murschetz et al, 2013)

Broadcast executives are therefore challenged by the need of satisfying users’ expectations as well
as that of undertaking convergence between TV and internet worlds as competitive content portals
emerge on the internet and has resulted in absorbing into their markets shares (Tom Evens et.al,
2013). “As the oligopolies of the old are toppled, an entirely new ecosystem may rise up in its
place” (Wessel 2013). The digitization having distorted boundaries which existed between
previously distinct networks and technologies such as media, telecommunications and computing,
industry architectures and the usual business models used within this converged ecosystem are
highly constrained (Chan-Olmsted & Kang 2003). While the technology-driven process impulses
on Broadcast managers’ executives to create new business models, broadcasters are challenged by
the search of how to reconfigure and reinvent value in the digital domain (Barwise & Picard 2012,
Küng et al. 2008, Picard 2004).

Though the booming of internet has opened up profitable opportunities of connectivity through
various platforms, it is however observed that new business models for generating revenues that
contribute to company profitability have not evolved at the same pace as the increase of audience
segments. It is without doubt that broadcasters should review their models so as to match the
technology convergence with their business targets (Michael Dumas, 2009). While the relationship
between audio-visual media on the internet and the traditional transmission is evolving, earning
profit through these transmission channels is still challenging. Since broadcasters are now
operating in a new commerce characterized by tough competition, there is a fast growing need of
finding the appropriate scheme for overcoming profitability limits through suitable broadcasts
formats that appeal to all audience segments, as broadcasting and their formats is becoming
increasingly stressed in todays’ media convergence industry business environment. In other words,
appropriate technology is mandatory to align the business with the current market environment
realities Broadcasters are required to continue to transform into high performing digital
multiplatform businesses that drive success from an increasingly intimate knowledge of their
consumers. (Jin-Sik Park, 2016).
Linear broadcasting remains at the core of successful business models while it is continuously
loosing financial sustainability due to the hardship caused by the underlying economics in a
fragmented market. To remain in the competition, traditional broadcasters have to increase their
relevance to consumers on available platforms and transform their organizational capabilities to
create business models that successfully merge linear Radio/TV business with new channels and
products and as there is a real migration from conventional media to multi-platform outlook. It is
suggested that investment in staffing and re-versioning of content should be given a priority in
planning (Gillian Doyle, 2010).

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Media economy is then moving from a long-established broadcast model characterized by scarcity
with high barriers of access to the emerging online model defined by digital plenitude with the
flourishing of internet and worldwide web facilities significantly lowering the formers barriers of
access and cost, thus increasing the number of media companies and even individuals who are able
to produce and distribute content for online consumption (Brett Hutchins et.al, 2009). It is this
trend that is even forcing broadcasters to change the format of adverts and advertising, since the
behavior of their audience is also changing. It is now foreseen that in the future, viewers want to
see more of pertinent, intrinsic and interactive adverts run in the breaks of their favorite shows or
otherwise they will simply switch off their TV, pause or turn to their second channel during the
ads time (Mari Rasimus, 2014). A new socially and discerning audience is now claiming more
interaction and new ways to actively participate while watching TV. Ignoring these segments of
viewers, it is to run at your peril (Juliet Stott, 2014)

2.6. Competition
Competition is one of society’s most powerful forces for making things better in many fields of
human endeavor. Competition is pervasive, whether it involves companies contesting markets,
countries coping with globalization or social organizations responding to societal needs. Every
organization needs a strategy in order to deliver superior value to its customers. This is truer today
than ever before, as competition has intensified dramatically over the last several decades in almost
all domains. It has spread across geography, so that nations must compete to maintain their existing
prosperity, much less enhance it. Competition has also spread to all sectors, including fields like
arts, education, health care, and philanthropy, where there are growing needs but scarce resources.
Today organizations in all spheres must compete to deliver value. (Michael E. Porter, 1985).
According to Friedrich A. Hayek views (2018), competition is considered to be essentially a
process of opinion formation. By spreading information, it creates unity and coherence of
economic systems which are presupposed when thinking of it as one market. That process creates
the views about what is best and cheapest, and people know at least as much about possibilities
and opportunities as they do in fact because of it. Thus, it is a process which involves a continuous
change in data and whose significance must then be completely missed by any theory which treats
theses data as static. There exist four types of economic competition, including perfect
competition, monopolistic competition, oligopolistic competition and pure monopolistic. Ideally
in a capitalist market like Rwanda, business firms should be involved in perfect competition where
no firm dominates the market.

In broadcasting industry, competition has generally been measured by the number of stations in
the market (Busterna, 1980, Lacy, Atwater, Qin & Powers, 1988). This means that the higher the
number of radio/TV stations, the higher the market is saturated and the higher is the competition.
The intensity of competition could also be measured by the difference between a firm’s market
share and the market shares of the leading competitor in the same market (Lacy, 1992; Lacy et al.,
1989; Russi et al., 2014). This is in terms of market share. In the angle of customer expectations,
broadcast stations serve two distinct groups of clients, content consumers (listeners/viewers) who
have a permanent demand of information and /or entertainment, and advertisers whose the wish is
to have maximum attention of potential customers (Tore Nilssen, 2003). By this, the two groups
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affect each other’s well-being in that Radio-TV listeners/viewers dislike advertising, whereas
advertisers like viewers’ attention. Thus, broadcasting market constitutes a two-way externalities,
known as two-sided market in economics.
This same concept was also explored by J. Gabszewicz stating that the competition of broadcasting
services lies between two interfaces. The first one is the advertising market where audience and
part of broadcasting time is sold, the second interface lies in increasing their audience size through
attractive program-mixes. Therefore, the larger the audience of a particular station , the more
attractive the channel shall be as a media support for advertisers, and the higher their willingness
to pay for having ad-spots inserted in its programs.( J. Gabszewicz et.al, 1999). This shows the
fact that the impact of the advertising message increases with the size of audience. In the other
hand, the higher the advertising rate of a broadcasting station, the larger the number of its viewers
who are willing to switch to competing programs with lower advertising rates. In fact, it is
recognized that most TV viewers are advertising-avers, and incur a decrease in utility when
watching the program of a channel whose advertising rate increases. Broadcasters should take care
of the balance between advertising time and program broadcasting time because if they don’t do
so, they will lose audience due to a high rate of advertising, which in return will result in losing
the attractiveness of the channel in the advertising market (Didier Laussel et al., 1999)
This double-sided challenge is also confirmed by David Godes, (2009), who stated that media
companies compete in two connected markets as they face rivalry for the sale of content to
consumers while they compete for advertisers who seek access to the attention of these consumers.
As a matter of fact, this two-sided competition has implications on the actions and source of profits
of media companies. David Godes concluded that in such situations, media companies may opt to
charge higher content prices in a duopoly than in a monopoly. This happens because competition
for advertisers can reduce the return per customer impression from the ad market, making each
firm less willing to underprice content to increase demand. Greater competitive intensity may thus
increase content profits and decrease ad profits. This is in sharp contrast to those in a regular one -
sided product market, in which competition typically lowers product prices and profits. From the
above facts, it is clear that the economic performance of Radio/TV business is dependent to the
ability of management team to balance the two sides of the market in a way that the equilibrium
shall always be maintained such as none of the two sides doesn’t compromise the other side.

Nonetheless, in the digital era, media companies are advised to conduct their business in a
discerning spirit since they produce money that is spent wisely (Radu, Preoteasa, 2012). This
applies both to private and public media companies in the actual context of global expansion of
the market with a variety of offers and choices found on the market in the global competition. The
economic administration of broadcasting stations requires today maximum caution and with the
advance of digital systems, the operators have to prove professionalism, competition, anticipation
and precision in their actions (Daniel Burtic, 2013).

[18]
2.7. About competition in Rwandan broadcasting sector
In Rwanda, Broadcasting Services were officially launched in 1963 starting with Radio. In 1961,
the first studios of radio Rwanda shifted from Usumbura (former Burundian capital) and were built
in Kigali. Broadcasting services were started 2 years later on. After almost 30 years, in 1992, the
first TV station was switched on as TVR, operated by the former ORINFOR. At that time, less
than 50% of the country was covered by the signal and there was an extremely low rate of Radio
and TV penetration, less that 1.25% (TV) of the total households 1 while the coverage is today
estimated at 98% for Radio and 95% for TV.
After the liberalization of Rwanda media market in 20022, multiple media outlets have emerged.
The increase has been so significant, from 1 to 34 radio stations in 2020. In addition, as
recommended by ITU to all state members, the analogue switch off for TV broadcasting services
was effective in 2014 in Rwanda. Digital TV transmission infrastructure was deployed, enabling
the increase of TV channels per multiplex. As a result, new entrants came into the game and the
number of TV stations raised from 1 in 2002 to 15 in 2020. The table 2 shows the evolution of
broadcasting market in Rwanda since 1961 up to the research date.
Table 2: Evolution of broadcasting market in Rwanda

Year Number of Number of Comment

Radio TV stations
stations
1961 1 0 The year Radio broadcasting is launched
1992 1 1 The year TV broadcasting was launched
1994 2 1 The year the 2nd radio was launched
2003 4 1 The year media market was liberalized
2004 10 1 Only Rwanda Television as national channel
2005 14 1 Only Rwanda Television as national channel
2006 15 1 Only Rwanda Television as national channel
2007 18 1 Only Rwanda Television as national channel
2009 22 1 Only Rwanda Television as national channel
2010 23 1 Only Rwanda Television as national channel
2011 25 1 Only Rwanda Television as national channel
2012 27 1 Only Rwanda Television as national channel
2013 32 2 The year Digital TV was launched in Rwanda by Star
Media Africa
2014 33 6 The year the digital TV transmission Network was
launched
2015 34 9
2016 31 12
2017 35 14
2018 34 13
2019 33 18
2020 34 18

1
World Bank database
2
The state of Media Freedom in Rwanda, May 2015.
[19]
 Progressive emerging of broadcast media in
Rwanda from 1961
40
35
30
25
20
15
10
5
0
1961 1992 1994 2003 2004 2005 2006 2007 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Number of Radio stations Number of TV stations

Figure 2: Progressive emerging of broadcast media in Rwanda since 1961

Source: RGB Reports.

For RBA as the former beneficiary of Rwandan media market monopoly, the charts above show
clearly that there is an emerging competition on the market. The small market is unprecedentedly
shared among dozens of operators who have already entered the sector. Apart radio and TV
services, the deployment of broadband internet has stimulated the rise of online media houses.
These constitute another competitor to RBA since the population is aware of the mobility and
accessibility of online services. The table 3 shows the evolution of online media houses in Rwanda
in the last four years.
Table 3: Online media houses in Rwanda

Year Number of online media houses

2016 80
2018 23
2019 23
2020 23
Source: RURA

2.8. Conceptual framework

The financial health of any company is normally reflected in a set of financial ratios over a certain
period of analysis. In this study, four variables were defined including the financial health of RBA
which was considered as the only dependent variable in this exercise; national emerging
competition, technology convergence and shocks such as Covid-19 as independent variables of the
analysis, considered instead as threats in the language of strategic analysis. The total profit of RBA
on the given period was balanced against the revenues to determine the net profit margin, as it is
usually considered as the best metric of financial position by the Corporate Finance Institute. The
financial health of RBA was then analyzed within the philosophy of SWOT analysis whereby
emphasis was put on potential threats that could impede the financial growth, as these were defined
[20]
by the emerging competition on the national market materialized by 34 FM stations and 18 TV
stations in competition with RBA to share the small national market in one hand, and the
technology convergence on the other side. The impact of unforeseen shocks such as Covid-19 was
explored in the same foot as threat. However, technology convergence was considered as a double-
agent whereby it was conceived as an independent variable which could also impact positively on
RBA’s financial health if appropriate measures were undertaken. The concept is captured in figure
3.

- Threat
- Opportunity
Threat
RBA
Emerging
competition
Financial Technology
convergence

Health
- 34 FM Radio Stations - Radio, TV services
- 18 TV Stations Dependent variable on the smart phone
- Revenues - Social Media
- Profit
- Net margin

Figure 3: Research conceptual framework

Independent variables
Source: Author

Since regardless of cultural, political, and social roles and expectations for media, media must
cover their costs and create returns, just as any other business, or they will wither and disappear,
it was worth of consideration to emphasize how Rwanda Broadcasting Agency as a media firm
must be organized, and operated as an economic unit, essentially the decision making involving
resolutions relating to resource and financial issues which have a direct implication on the
company’s profitability in order to be viable ( Prashant Kumar, 2014).
In addition, considering the impact of media market liberalization on market share in Rwanda since
2003, RBA must be prepared to resist the high emerging competition which has results in a high
number of broadcasting stations operating on the same market. It is mandatory to define
appropriate strategies towards the financial sustainability in such a saturated market. In the other
hand, considering the rapid pace at which technology convergence especially through social media
is radically challenging the landscape of Television and broadcasting in general, forcing the nature
of programs and adverts to change, it is time for broadcasters to rethink their strategy in order cope

[21]
with the rapid evolving technology world. It is very necessary for media companies to design and
work for their survival in the Internet era.
Lastly but not leastly, it is with no doubt that the quick outbreak of Covid 19 has extremely exposed
the vulnerability of companies. The entire globe was constrained to work remotely with very
limited physical meeting and access to traditional business facilities. More and more enterprises
have missed and will continue to miss their financial targets because of supply chain disruptions
and dampened customer demand. Only organizations that have web-enabled their businesses were
and will be in much better position to weather this pandemic, both in the short and long term. RBA
is not an exception. Therefore, it was necessary to identify how RBA should be a digital-enabled
working environment for a healthier financial life whereby customers should access RBA
services/products and transact without involving their physically presence to RBA offices, while
RBA community should easily collaborate and exchange information without the need of
involving too much physical resources. Few researchers had linked the use of IT (Faustin
Ndayambaje, 2014) and internal control (Nsabimana Nkusi Jean Claude, 2018) to RBA financial
performance in general but the identification of factors that can foster the financial health of
Rwanda Broadcasting Agency in the context of Rwandan emerging competition and international
technology convergence is necessary.

[22]
3. Research Methodology
This study aimed at identifying key strategic factors that are able to contribute to the financial
performance of Rwanda Broadcasting Agency as an ICT company in a n emerging competitive
market environment in one hand and global technology converged world in the other hand. Today,
as a matter of fact, RBA faces a big challenge as the formerly monopolistic national market
environment is now shared among dozens of operators while the global convergence brought by
the digital revolution constitutes another side of pressure in terms of market control in general and
consumer habits satisfaction in particular.
For this purpose, a clear understanding of companies’ financial performance in general and
financial health of broadcasting firms in particular was mandatory. Thus, secondary data helped to
discuss the financial performance in the light of the research. On the side of variables that could
influence the financial health in the context of this study, it was necessary to have a clear view of
in what technology convergence constitutes a challenge in today’s ICT markets in general and to
RBA in particular. A good number of literature was then reviewed to grasp the whole meaning of
convergence towards the objectives of the study. The evolution of Rwandan media market was
also discussed as the other variable with a direct impact on RBA’s financial health. The exercise
was done through existing works to come up with the current situation of market environment in
the angle of national competition. In fact, the use of all these secondary data as collected from
previous researches by different scholars, government reports and other studies was imperative to
have the acquaintance of required information in order to tackle the study with a tangible
knowledge baseline.
In addition to the secondary data, primary data collected directly from participants were used. A
dedicated questionnaire was used for this purpose and distributed to the respondents who were
first explained why they were chosen and what was expected from them. They were in fact solely
explained that this was a purely an academic work and that all the information that they were to
provide was to be treated anonymously and confidentially without disclosing it to anyone.
Moreover, they were clearly informed that they had the full right to withdraw or not answer
according to their wish. This was materialized by a participant briefing sheet and informed consent
form that was voluntarily signed by all participants before responding to the survey (Annex 1).
Considering that this study needed numerical data in some cases and respondents opinions,
perceptions or experience in the other cases, quantitative and qualitative methods were combined
to achieve the expected goal. A questionnaire served as a tool and it comprised four main sections,
including the financial health of RBA within the last five years, Status of competition in Rwandan
media market and its impact on RBA revenues, understanding of technology use in RBA daily life
and how it contributes to financials and the effects of today’s technology convergence, and the
good practices that RBA should consider as strategic for a brighter future. The Financial health of
RBA was analyzed on a period of 5 years from 2014 up to 2019, and the net margin was the key
ratio used to evaluate the performance. As the target population for the questionnaire was mainly
about 200 employees of RBA at Kigali head Office, the sample size was first determined. A simple
and practical formula known as Slovin’s, (Estela G. Adanza et.al, 2006) was used as follows:

[23]
 𝐍
𝐧=
𝟏 + 𝐍𝐞𝟐
Where: n = 𝑡ℎ𝑒 𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒
N = 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑠𝑖𝑧𝑒
e = 𝑡ℎ𝑒 𝑑𝑒𝑠𝑖𝑟𝑒𝑑 𝑚𝑎𝑟𝑔𝑖𝑛 𝑜𝑓 𝑒𝑟𝑟𝑜𝑟
Putting 𝐞 = 0.05, the size of sample was calculated and found to be 133. Therefore, the sample
size of this study was 133 employees at RBA Headquarters. To collect credible information as
much as it was possible, respondents among employees were selected using simple random
sampling and purposive random sampling techniques.
Different procedures were used for data analysis since this study involved qualitative and
quantitative data at a certain level. For qualitative data, various steps including data organization,
identification of framework for analysis, data sort according the identified framework and
descriptive analysis were undergone. Thereby, a range of processes and procedures to move from
collected qualitative data into some form of explanation and interpretation was used. With an
interpretative philosophy, the meaningful and symbolic content of data were examined. Deductive
approach whereby research questions mainly about competition, convergence and strategies for
better financial performance were used to group data and then look for similarities and difference
was used to come up with documented conclusions. To easily group and compare similar or related
pieces of information from various respondents in focus groups, the process of coding was used
by attaching labels to lines of concerned text. Data were treated using professional tools such as
SPSS Pro and quantitative data were analyzed using descriptive statistics. The analysis was always
done in line with the limitation of the study and its objectives.

[24]
4. Findings/Results/Data Analysis
Before discussing the findings of this research, an overview of RBA is necessary. The paragraphs
below talk of RBA at a glance.

Rwanda Broadcasting Agency (RBA) is a Rwandan National Broadcaster promulgated by the Law
No 42/2013 of 16/06/2013, transforming the former ORINFOR into RBA. RBA is a body
corporate and wholly owned by the Government of Rwanda but independently run to meet the
objectives stipulated in the RBA charter. In total, RBA has nine divisions including the General
Directorate, Radio, TV, Technical, Marketing & Business Development, Finance, Human resource
& Administration, Planning & Budget and Company Secretariat.

The funding of RBA is done through internal generated revenues and a portion from Government
sponsorship. However, the RBA’s funding was first reduced in the May 2013 Government Budget.
As indicated by Government at the time, further reductions will follow. It has indicated that it
believes this cut should be funded by efficient business models and savings. It is here that RBA
needs to develop appropriate strategies in order to be able to survive to the high competition in a
very disruptive digital environment, when media organizations most need agility, flexibility and
quick responses to the changes happening all around us. The absence of critical understanding of
the extent of RBA’s funding can considerably compromise the Agency’s capacity to plan for the
future.

4.1. Profile of Respondents

4.1.1. Gender characteristics
During this study, 37 women representing 28% of all respondents and 96 men representing 72%
of the sampled population have participated. This gender imbalance was due to the fact that there
is usually a very little number of female in the Technical Division of Rwanda Broadcasting Agency
which itself count 90 staff out of the total employees of the institution. This is directly linked to
the cultural background of Rwanda whereby a few number of female could afford engineering
studies.

GENDER CHARACTERISTICS OF
RESPONDENTS
Female ,
28%

Male, 72%

Figure 4: Gender of respondents

Source: Primary Data

[25]
4.1.2. Respondents’ Level of Education

As indicated in the table 4, six (6) respondents were of high school level against 107 of Bachelor’s,
20 of Master’s degree level. It was found that there was no PhD level among all respondents and
this was directly justified by the fact that there was no Doctor of Philosophy at all in RBA staff at
the time of this research. The table 4 indicates the corresponding percentages of education level
for the surveyed population.
Table 4: Respondents Educational profile

Degree Number/Frequency %
High School 6 5%
Bachelor 107 80%
Masters 20 15%
PhD 0 0%
Source: Primary data
4.1.3. Age groups

Also, the researcher investigated the aging of respondents to have a picture of the whole sample
population in terms of maturity and professional experience. The age bracket of respondents shows
that their age varies a lot. Mainly it was found five (5) age groups ranging between 18 and above
55 years old. The majority (60%) was found between 36 and 45 years. The second group (24%)
was found between 26 and 35 years, the third group (8%) between 46 and 55 years. The fourth and
fifth groups with very low percentage were found in the two boundaries age, 6% for the youngest
group (18-25) and 2% for the oldest group (56+). The table 5 gives more details about the age
characteristics of respondents while the trend is shown by figure 5.

Table 5: Respondents age group

Age Group Frequency/Number %

18-25 8 6%
26-35 32 24%
36-45 80 60%
46-55 10 8%
56+ 3 2%
Source: Primary data

[26]
 Age Groups of Respondents
90 70%
80 60%
70
50%
60
50 40%
40 30%
30
20%
20
10 10%

0 0%
18-25 26-35 36-45 46-55 56+

frequency/Number %

Figure 5: Trend of Respondents' age

4.1.4. Experience in RBA

As explained above, the professional experience of respondents was investigated and 46% of
respondents stated that they had worked at RBA for a period ranging between 3 and 5 years, 38%
had worked at RBA for a period between 6 and 10 years while 11% have worked there for a period
ranging between 1 and 2 years. It was found that a very little number of workers from the
respondents group (5%) have worked in RBA for more than 10 years as indicated in the table 6.

Table 6: Professional Experience of Respondents

Experience in RBA Frequency %

1yr-2yrs 15 11%
3yrs-5yrs 61 46%
6-10yrs 51 38%
10yrs + 6 5%
Source: Primary data

4.1.5. Profession/Department of Respondents

In parallel to the experience within RBA, the study has also investigated the domain of activity for
each respondent, to get assured that the information to be revealed shall be of a certain relevance
based on the respective departments of respondents. It was thus found that more respondents were
mainly from Technical and Commercial Departments within RBA, and this was confidently
interesting since much information was to come from technical and marketing divisions. 50% of

[27]
respondents were from Technical and 40% from Marketing Division. Even though the numbers
for Finance are very low (6%), this does not mean that Finance was neither given priority. It was
considered as a key department but as it has few workers in general, only 6% of the total
respondents were picked from finance to inform about financial matters. The respective
departments for all respondents were found to be distributed as follows (Table7):

Table 7: Respondents' profession

Profession/Department Occurrence %
Commercial/Marketing 53 40
Finance 8 6
Technical 66 50
Administration 4 3
Legal 2 1
Source: Primary data

4.1.6 Nationality of Respondents

According to the survey data, all the respondents were found to be Rwandans. No expat was found
in the group (Figure 6) and this was explained by the fact that there was typically no foreigner
workers within RBA at the time of this research. This increased the confidence of findings because
all the respondents were found to be familiar with the national media market context with enough
information about Rwandans’ consumer behavior and relevant information about RBA.

Nationality of Respondents
140 Rwandese, 133

120

100

80

60

40

20
Expat, 0
0
Expat Rwandese
Figure 6: Nationality of Respondents

Source: Primary data

[28]
4.2. Evaluation of RBA financial health
The designed questionnaire about RBA financial health aimed at collecting information about
revenues, profitability and hence net margin on the period of five (5) years from 2014/2015 up to
2018/2019 fiscal years. These data were collected from Finance and Planning & Budget
departments of RBA. Since a good part of RBA revenues comes from Government subsidies, the
researcher wanted to highlight how the situation should look like in the absence of these subsidies.
The table 8 summarizes the financial health of RBA during the last 5 years.
Table 8: RBA’s financial indicators from 2014 to 2019

Indicator 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019

Internal 3,412,464,043 4,105,130,913 4,899,274,580 4,169,289,912 5,251,052,192
Generated
Revenues
Government 1,905,204,128 1,886,257,642 2,940,891,231 2,083,871,231 2,135,226,080
Revenues
Total Revenues 5,317,668,171 5,991,388,555 7,840,165,811 6,253,161,143 7,386,278,272
Profit 794,132,483 - - 56,179,509 263,415,797
Loss - 11,397,133 346,891,669 - -
Source: RBA Finance Division, June 2020
Net profit margin

794,132,483
- 2014/2015: 𝑋100 = 15%
5,317,668,171

- 2015/2016: No profit (Loss= 11,397,133)

- 2016/2017: No profit (Loss= 346,891,669)
56,179,509
- 2017/2018: 𝑋100 = 0.9%
6,253,161,143
263,415,797
- 2018/2019: 𝑋100 = 3.6%
7,386,278,272

From the figures above, it is clear that during the last 5 years, the financial health of RBA has not
been good at all. The first year was characterized by a net profit margin of 15%, while the two
following years were characterized by losses at a growing rate (11,397,133 for 2015/2016 and
346,891,669 for 2016/2017). After that period, a slight improvement was observed with a net profit
margin of 0.9% for 2017/2018, followed by a net profit margin of 3.6% for 2018/2019. The
figures/charts 7 and 8 show the profit and loss trend on the concerned period.

[29]
 TREND OF RBA'S NET PROFIT MARGIN
IN 5 YEARS SINCE 2014
16% 15%
14%
12%
10%
8%
6%
3.60%
4%
2% 0.90%
0% 0%
0%
2014/2015 2015/2016 2016/2017 2017/2018 2018/2019
-2%
-4%

Figure 7: Trend of RBA's profitability on 5 years

Source: Primary data

Trend of Loss since 2014 to 2019

400000000
350000000
300000000
250000000
200000000
150000000
100000000
50000000
0
2014/2015 2015/2016 2016/2017 2017/2018 2018/2019
-50000000
-1E+08

Figure 8: Trend of loss during 5 years

Source: RBA Finance Division, June 2020

Though the trend of profit is not good with a very remarkable loss situation, revenues growth
was found to be almost continuous (Figure 9).

[30]
 TREND OF GENERATED REVENUES
FROM 2014 TO 2019
6,000,000,000

5,000,000,000

4,000,000,000

3,000,000,000

2,000,000,000

1,000,000,000

0
2014/2015 2015/2016 2016/2017 2017/2018 2018/2019

Figure 9: Trend of revenues growth on 5 years period

Source: RBA Financial Division

Apart from the trend above, the data from RBA Planning & Budget office indicated that due to
Covid-19 outbreak, RBA could only achieve 5% (Figure 10) of revenues growth in 2020 against
13% of its planned growth compared to the previous year.

Impact of Covid-19 on RBA Revenues

14% 13%

12%

10%

8%

6% 5%

4%

2%

0%
2020 Expectations 2020 Achievement

Figure 10: Impact of Covid-19 on RBA revenues

Source: RBA Planning & Budget Office

[31]
4.3. Evaluation of competition growth in Rwanda Media Market

Considering that the evaluation of competition growth in Rwandan media market constituted one
of the key points of investigation, the research wanted to know how RBA community was aware
of the situation and how they considered the situation vis-à-vis their marketing strategies.
Questions about market liberalization and the number of radio TV stations were therefore used to
capture required information from them. It was found that all RBA workers were aware that since
2003, new Radio/TV stations entered the market thus creating a quick high competition with 34
Radio Stations and 18 TV stations today (Figure 11).

Progressive emerging of broadcast media in

Rwanda from 1961
40 35
33 34 34 33 34
35 32 31
30 27
25
25 22 23
20 18 18 18
14 15 14
15 12 13
10 9
10 6
4
5 10 11 21 1 1 1 1 1 1 1 1 1 2
0
1961 1992 1994 2003 2004 2005 2006 2007 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Number of Radio stations Number of TV stations

Figure 11: Progressive emerging of broadcast media in Rwanda

Source: RGB & RURA Reports

As consequence of the emerging competition, all respondents confirmed that the boom of new
Radio/TV stations brought the former RBA monopoly to an irreversible end. The figure 12 shows
the total conviction of respondents that RBA monopoly ended with Rwanda Media market
liberalization.

[32]
 COMPETITON IN RWANDA MEDIA MARKET
ENDED RBA MONOPOLY
Yes No

No
0%

Yes, 133, 100%

Figure 12: End of RBA's monopoly by competition

Source: Primary data

Marketing and Finance people from the respondents stated that due to the emerging competition,
the RBA’s market share got considerably lowered and as a consequence the usual income
generated by Radio and TV got reduced, which affected the net margin of the company. This was
confirmed by all 8 people from RBA Finance and all 53 people from Marketing and Business
Development Divisions as illustrated by the figure 13.

Adverts Revenues got reduced due to competiton

70
Yes, 61
60

50

40

30

20

10
No, 0
0
Yes No

Figure 13: Impact of competition on RBA adverts revenues

Source: Primary data

4.4. Technology used in RBA daily activities and its impact on financial health

Since the impact of technology on companies’ performance was proved by many researchers, it
was necessary to investigate the awareness of RBA workers about that fact. Views about the role
of technology in all business process in today’s environment were collected and all targeted
[33]
respondents from Business Development and Technical Divisions (127) confirmed that they agree
that Technology is key in all business process (Figure 14).

Technology is key in all business

process
No
0%

Yes
100%

Yes No

Figure 14: Perception of Respondents on the role of technology in business

Source: Primary data

Further, the researcher investigated the technology used in RBA day to day, aiming at indicating
if that technology covers all relevant areas of company’s business life to boost financial its
financial performance. 79 respondents confirmed that according to them, the technology used in
RBA daily life doesn’t cover all relevant areas of business life, against 50 respondents who stated
that the technology used covers all relevant areas. The figure 15 gives more details.

Relevance of used technology in RBA to boost financial

performance

Don’t know 4

The used technology doesn’t cover all

79
relevant areas in RBA’s life

The used technology covers all relevant

50
areas of RBA’s life

0 10 20 30 40 50 60 70 80 90
Figure 15: Relevance of used technology in RBA to boost financial performance

Source: Primary data

[34]
Apart from covering all relevant areas of RBA business life, the technology was also evaluated
against its capability to enable market competition as seen by RBA community and in the national
media market context. As shown by the figure 16, 73 people equivalent to 55% of respondents
said that they consider the technology used within RBA business activities not enough to deal with
market competition in national media sector.

Readiness of RBA Technology to deal with market competiton

Don’t know 9

The current technology within RBA is not

73
enough to enable market competition

The current technology within RBA is enough

51
to enable market competition

0 10 20 30 40 50 60 70 80

Figure 16: Readiness of RBA Technology to deal with market competition

Source: Primary data

Talking of the insufficiency of current technology capacity to deal with high national completion,
most of respondents indicated that even if technology convergence constitutes a challenge to RBA
business, it also creates a number of opportunities such as new channels of increasing audience
and engaging viewers participation, new advertising channels and thus increased revenues. The
figure 17 shows how RBA community considers the flourishing of social media platforms as a
new business opportunity.

Belief that the use social media in advertising can

increase sales and revenues for RBA
150 125 133
121
96 100
100

50 37 33
12 8 0
0
Tw itter Facebook Instagram Website YouTube

Yes No

Figure 17: The use social media in advertising can increase sales and revenues for RBA

Source: Primary data

[35]
Respondents added that these social media platforms could be used by RBA by establishing a
separate advertising rate card for each of them and by an active presence of Radio and TV on all
these platforms.
Having been conducted during Covid-19 outbreak, the research could not bypass the impact of the
pandemic. It is in this angle that the appropriateness of current Information technology used within
RBA was evaluated in line with technology readiness to mitigate Covid-19 challenges by enabling
business continuity during the pandemic lockdown. 51% of respondents agreed that the current
Information Technology used in RBA was not enough to mitigate all Covid-19 business-related
challenges, especially business continuity. This was proved by the fact that the business continuity
was highly affected by the lockdown, where physical presences were prohibited. Sales executives
could not meet clients for business negotiations purpose. The figure 18 highlights the respondents’
positions.

Rediness of the current technology to mitigate Covid-19

challenges within RBA Business
Don't Know
11%

Yes
38%

No
51%

Yes No Don't Know

Figure 18: Readiness of the current technology within RBA to mitigate Covid -19 challenges

While 100 people out of 130 believe that through technology RBA can improve on its financial
health (figure 20), the respondents indicated that there were some improvements that could be
done for RBA to be resilient enough to the shocks in terms of technology readiness. 60% of
respondents confirmed that e-commerce portal should be added to RBA technology package in
order to be resilient enough and deal with national competition. It was also suggested by many
respondents that disaster recovery and cloud computing for some services should be considered as
what can be added to the current Information technology within RBA to be enough resilient and
deal with national competition. Respective statistics are indicated on the figure 19.

[36]
 What can be added to the current technology within RBA to be
enough resilient to chocks like Covid-19 and deal with national
competition

Don’t know 7

e-commerce portal to enable business

80
continuity

Disaster recovery system 26

Cloud computing for some services 20

0 10 20 30 40 50 60 70 80 90
Figure 19: Propositions on what should be added to the current technology within RBA to be enough resilient to chocks like
Covid-19 and deal with national competition

75% of all respondents (100 people out of 133) conformed that through technology, RBA
can improve on its financial health.
Through technology, RBA can improve on its financial health
120
Yes, 100
100

80

60

40 No, 30

20
Don't know , 3
0
Yes No Don't know

Figure 20: Respondents position on how RBA can improve its fina ncial health through technology

Source: Primary data

4.5. RBA Business Strategy

For the products listed in table 9, the researcher found that RBA has never conducted any
audience/market survey aiming at knowing what the public expects from them. This means that
these products are sold as they are without involving the customer. The figure 21 shows that all
respondents confirmed that such a culture doesn’t exist within RBA.

[37]
 Table 9: RBA products list

S/N Product
01 Adverts sales on Radio
02 Adverts sales on TV
03 Radio announcements
04 Public Relation shows on Radio
05 Public Relation shows on TV
06 Radio hosting on RBA FM Transmission network
07 TV hosting on RBA DTT Transmission Network
08 Production services
10 Audio on-Demand
Source: Primary data

CULTURE OF CONDUCTING
AUDIENCE/MARKET SURVEY BY RBA
RBA has a culture of doing audience survey
RBA doesn’t do audience survey
Don’t know

0%

133, 100%

Figure 21: Views of respondents on RBA's culture vis-à-vis audience and market survey

Source: Primary data

In addition to the culture of market survey, the study wanted to know at which level RBA has
defined a unique selling proposition. 77 respondents out of 133 stated that they according to them,
RBA doesn't have a unique selling proposition on Rwandan Media market, while 43 people
confirmed that a clear unique selling proposition exist for RBA business. 13 respondents claimed
that they didn’t know about that. Figure 22 illustrates the findings.

[38]
 Having a clear Unique selling proposition

13
43

77

RBA has a clear unique selling proposition on Rwandan market

RBA doesn’t have a clear unique selling proposition on Rwandan market
Don’t know

Figure 22: Views of respondents about RBA and Unique selling proposition

Source: Primary data

Apart from the unique selling proposition, the culture of doing/producing what the customers want
was investigated as part of RBA business life. Unfortunately, it was found that this culture doesn’t
exist in RBA as 130 respondents indicated that RBA doesn’t have such a culture (Figure 23) since
they have never seen any market research undertaken.

Culture of producing what the customer wants

Don’t know 3

RBA doesn’t have a culture of

doing/producing what the customers want
130
in its business life because they never do
market research

RBA has a culture of doing/producing what

the customers want in its business life 0
because they regularly do market research

0 20 40 60 80 100 120 140

Figure 23: Views of respondents about RBA and what the customer wants

Source: Primary data

As part of business strategy, the level of exploitation of social media platforms in daily broadcast
programs was scrutinized. All respondents stated that Radio & TV programs were accessible on
RBA website, against 50 respondents who said that Radio & TV programs were accessible on

[39]
YouTube. They indicated that those programs were not yet accessible on Twitter, Facebook, and
Instagram while these are also among popular platforms used by Rwandan community (annex 4).

Accessibility of RBA broadcast programs on social media

platforms
120%
100%
100%

80%

60%

40%
25%
20%
0% 0% 0%
0%
Radio & TV Radio & TV Radio & TV Radio & TV Radio & TV
programs programs programs programs programs
accessible on accessible on accessible on accessible on accessible on
Twitter Facebook Instagram Website YouTube

Figure 24: Accessibility of RBA broadcast programs on social media platforms

Source: Primary data

After explaining the key words such as digital transformation and quality function deployment,
the researcher asked questions about what RBA thought of most importance in the context of
boosting company’s profitability. Respondents were given four propositions including the
increase of prices of some RBA’s products, reduction of employees number, change of the way
business is conducted (Digital transformation), and having the culture of quality function
deployment. The findings are capture on the figure 25.

Suitable option for RBA to boost the profitability

Don’t know 19

Have the QFD culture 42

Change the way business is conducted

70
(Digital transformation

Reduce the number of workers 2

Increase the prices of some products 0

0 10 20 30 40 50 60 70 80
Figure 25: Suitable option for RBA to boost the profitability

Source: Primary data

[40]
Given that digital transformation was one of what was needed to improve on RBA’s financial
health and cope with the rapid technology changing world, it was of paramount importance to
know about the key areas of RBA life that respondents thought they need a quick transformation.
A list of choice was proposed including Routine administrative processes, documents sharing &
contract management, Sales value chain, and Management of Transmission Network. The figure
findings are captured on the figure 26.

Areas of RBA life that need a quick

transformation
Routine administrative
processes
2, 1%
Document sharing &
37, 28%
40, 30% Contract Management
Sales value chain

9, 7% Management of
Transmission Network
45, 34% Others

Figure 26: Areas of RBA life that need a quick transformation

Source: Primary data

Respondents indicated also why those areas should be digitized and gave out their views about
how they think the digitization should look like. These are compiled in Table 10.

Table 10: Views about why and how the digital transformation should be done within RBA

Areas to be digitized Why the digitization How should the digitization be

Sales value chain RBA Sales value chain should
be digitized in order to assure
business continuity and attract
more customers, thus increase
revenues in a shortened time
through electronic transactions.
Management of The transmission network is the
Transmission heart of technical services for
Network radio and TV but its
management is done in a
traditional way. There is no
digital system through which all
[41]
done
An online selling facility should be
added to the usual website
www.rba.co.rw with a clear
description of RBA marketable
products.
A Network Operations Center
(NOC) could be installed in RBA to
enable permanent visualization of
the transmission network status
whereby through an appropriate
network management system and
 the 17 sites for FM and 14 sites
for DTT should be monitored
from a central network
management. As consequence,
operation and support takes
long as engineers in Kigali are
deployed to the regional sites
without having a clear picture
of the problem in case of
breakdown for example. Hence,
some unnecessary expenses for
field missions and maintenance
are incurred, with long time
response.
Routine For an improved collaboration
Administrative and process optimization by
Processes (store or enabling features such as
purchase requisitionelectronic processing from the
initiation to the final approval,
process, field mission
forms, process tracking on fixed or
documents
sharing and contractmobile devices, progress
management) notification to different users by
email or SMS, digital signature
and automatic report
generation. This will help to
eliminate paper work and all the
costs linked to it such as papers,
ink, printer accessories, etc.
The efficiency of the company
should thereby be increased,
with a good impact on the
financial health.
Document sharing Considering the size and nature
and contract of RBA, File sharing which is
management system normally the practice of
distributing or providing access
to digital media, such as
computer programs,
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Operations Support Solution
(OSS), the Network Operations
Center should monitor RBA
broadcasting network for alarms or
certain conditions that may require
special attention in order to avoid
impact on network performance.
The center should be based on a
complete Network Management
Solution (NMS) & Operation
Support Solution (OSS)
specifically built to address the
needs of the Broadcast industry. It
should be able to monitor all
SNMP-enabled devices in a
network, providing visualization of
their status and measurements from
a single map-based screen.
The processes should be brought to
mobile devices, the main feature
being the paperless process
management, either from a
computer or a smart phone.
Appropriate technology should be
selected. It is believed that Cloud-
based file syncing and
sharing services that implement
automated file transfers by
updating files from a dedicated
 multimedia (audio, images and sharing directory on each user's
video), documents or electronic networked devices are better.
books is a mandatory feature Hereby, files placed in this folder
that any digital working also should be typically accessible
environment should have through RBA intranet website and
within RBA. mobile app, and can be easily
Also, RBA needs a Contract shared with other users for viewing
Management System (CMS) or collaboration. Specifically, In
that should manage the and outgoing correspondences,
contracts from their creation to working documents such as
their closure. The system procedure manuals, internal rules
should have an automated manual, Staff statute, maintenance
calendar that reminds RBA manuals etc. shall be accessible on
dedicated staff of important this module
dates and deadlines as it has An automated contract
been proved that some contracts management system should be used
in RBA reach their deadlines to manage the production and
while people in charge are not management of contracts, Service
aware, resulting in losses in Level Agreements (SLA) and
some cases. Procurement Master Agreements .
Source: Primary data

Considering that today convergence is a fact, question about what RBA should do to stay on the
stage and take the lead on Rwandan market in a converged business environment was asked.
Respondents were given various propositions including continuous consultation with the public to
know what they want, establishment of more interactivity in all broadcast programs, keeping Radio
& TV traditional transmission channels as priority for business model, and active presence on all
platforms while establishing an advertising rate card for every platform. The output of the survey
is summarize on the figure 27.
What RBA should do to stay on the market and take
the lead in a converging environment

Others 1

Establishment of more… 17

Continuously consultation with the… 20

Active presence on all platforms… 90

Keep Radio & TV traditional… 5

0 20 40 60 80 100
Figure 27: What RBA should do to deal with convergence

Source: Primary data

[43]
Lastly but not leastly, respondents were asked about what RBA should do to deal with competitors.
They were given to choose among different propositions including a good knowledge of their
competitors, development of a clear unique selling proposition in the context of national
environment, getting the correct pricing, definition of entry minimization strategies, conduct a
regular market research, being as innovative as possible and improve on RBA customer service.
The findings are captured in the table 11. New products that should be explored by Rwanda
Broadcasting Agency include DVD selling, syndication, VOD and IPTV.

Table 11: Key strategies to handle competition

S/N Strategy Validity

01 Know competitors Yes
02 Develop a clear unique selling proposition Yes
03 Get the pricing correct Yes
04 Define entry minimization strategies Yes
05 Conduct a regular market research Yes
06 Be as innovative as possible (new products) Yes
07 Improve RBA customer service Yes
Source: Primary data
The findings above were analyzed and discussed in the light of research aims and objectives and
in the context of study limitations. The following paragraphs are dedicated to their interpretation
toward an elaborated and documented conclusion about what kind of factors to be aligned for
companies like RBA to have a good financial performance in a competitive and converging market
environment.

[44]
5. Data discussion /Interpretation
This study had the general objective of investigating the key factors that positively contribute to
the financial performance of ICT businesses in a competitive market environment brought out by
market competitors and technology convergence as observed in today’s business cases. In
particular, the research aimed at discussing RBA’s financial health over the last 5 years in order to
establish a linkage of such a health to possible factors. It also aimed at evaluating the emerging
competition in Rwandan media market as experienced by Rwanda Broadcasting Agency after the
liberalization of media market in 2003, in order to identify possible factors of financial
performance in such an environment. As the digital revolution created technology convergence,
the study analyzed the competition in the context of operators and convergence, in order to propose
possible measures to be taken for RBA financial performance. As the study was conducted amid
covid-19, it was necessary to identify the required level of ICT integration into corporate daily
activities to mitigate probable shocks that may arise at undefined time such as Covid-19, and then
maintain a good financial position through business continuity. The questionnaire was deigned
accordingly and all the collected data were analyzed in that context and the following paragraphs
are dedicated to the interpretation of findings.

Based on the findings as presented in the previous paragraphs, based also on the theory of
Corporate Finance Institute (CFI) that states that a 10% net profit margin is considered average, a
20% margin considered high (or “good”), and a 5% margin considered low, it was confident to
state that only the first year of analysis (2014/2015) was almost good for RBA. The two following
years were characterized by a financial position which was sick, while the other two following
years were characterized by a very low net profit. This trend was globally considered as alarming.
However, except for the year 2017/2018, all the remaining period was characterized by a linear
growth of revenues, from 3,412,464,043 in 2014/2015 to 5,251,052,192 in 2018/2019. Normally,
there should be a constant growth of profit but it was not the case. Even though all the information
was not revealed by the Finance department, the status of expenses within RBA during the last 5
years seemed to induce a loss on the periods indicated. The growth of internal revenues was not
sufficient to have a good financial position. As confirmed by previous researchers, the growth of
revenues was linked to the regular internal controls, use of information technology in some areas
of RBA activities and good management of the institution as well. It was however noticed that
these good practices were not extended to all financial corners of the institutions such as
expenditures and capital investment, whereby the growth of revenues didn’t really contribute to
the good performance.
In the other hand, it was found that with good marketing strategies, the generated revenues could
increase beyond the figures indicated. This was compromised by the rapid growth of competition.
33 radio stations and 17 TV stations from 2003 came to share the same market with RBA. The
monopoly was ended and a regression of adverts revenues was obvious in terms of market share.
Before, all the advertising opportunities were channeled to RBA and after the liberalization came,
the small market was to be shared among all broadcasters. This was due to the fact that customers

[45]
had then a wide range of choice (34 radios and 18 TV stations), while before 2003 RBA enjoyed
the monopoly in an absolute way. The competition is irreversible.
Moreover, despite the continuous growing competition, RBA has never defined a clear unique
selling proposition to deal with that competition. Nevertheless, no audience survey was conducted
since the existence of RBA. This was identified as alarming index in terms of competition and
business strategy in general. In the other hand, it was found that there were some gaps in current
information technology in use within the institution. This was especially proved by the outbreak
of Covid-19 whereby the sales value chain was disrupted, resulting in a loss of revenues. It was
expected a growth of 13% in comparison to the previous year (2017/2018) but due to the pandemic,
only 5% could be achieved. It was then found that the current technology was not ready enough to
face all the shocks in terms of business continuity. Technology convergence was also identified as
both challenge and opportunity to RBA. It was perceived as challenge because some businesses
today use social media to advertise their products without necessarily using the traditional radio
and TV channels, and it constitutes opportunity since the good integration with the traditional
transmission channels can increase the number of audience while advertising through social media
could also generate revenues as for the classic channels. It was therefore agreed that RBA should
be actively present on all these platforms, in order to maximize the business opportunity.

[46]
6. Conclusion:
Based on the discussion of findings and on the objectives of this study, it was fair to conclude that
all the objectives were achieved. Even though it was not easy to work under Covid-19 constraints,
the researcher got all the required data both from RBA key offices and RBA community. The
financial health of RBA on the period of last five years was discussed, and it was found worrying.
The national competition was evaluated, as well as the challenges and opportunities created by
technology convergence. The impact of Covid-19 on RBA’s financial health was also reviewed as
a strategic addition in order to identify a comprehensive set of key elements that could enable RBA
to have a better financial position in the future. The following paragraphs give more details.

Considering the status of RBA financial health in the last five years, considering also that the
situation could worsen by the total cut of Government subsidies as it was stipulated in May 2013
cabinet meeting, it was concluded that RBA is at a very high risk to be mitigated as soon as
possible. Some key factors that could positively influence the good financial position of RBA were
identified and proposed. These include strategies to maximize profit and as known, the
profitability depends always on a good management of revenues and expenses. It was therefore
suggested that RBA should implement digital transformation in order to reduce some unnecessary
expenses inherent to the analogue format of RBA business. The transformation should act in
priority at the level of sales value chain by availing an online selling portal whereby RBA products
and services could be digitally purchased even in the scenarios of limited physical contact of seller
and client. This feature should be incorporated into RBA website (www.rba.co.rw) to have a new
complete portal on which should appear a clear description of all RBA products and services.
Through such as system, sales could increase and thereby increased revenues.
The digital transformation should also occur at the level of Transmission Network Management.
This area constitutes the heart of technical services for radio and TV with a huge budget allocated
to it every year for operations and maintenance. In fact, RBA operates the largest FM and DTT
Network in Rwanda. In total, 17 transmission sites are distributed on the national territory and for
the management purpose, at least one technician is deployed to each site as site operator. At the
same time, there are at least 6 transmission Engineers at the Head Quarters and their role is to
ensure a proper functioning of the transmission network. They go for support to different sites
countrywide either to do the maintenance or repair the equipment while they are also deployed to
the daily production activities involving live coverage of different events. Only these engineers in
Kigali can intervene when site technicians have reported any technical problem to fix. The
consequence of this working chain is the long response time due to the fact that in some cases
engineers may even move to sites without knowing the exact problem, which as result takes a long
time to diagnostic and fix the issue while resources (vehicles, fuel, money, etc.) are being spent.
However, considering the expected service availability and short response time in today’s business
environments, with the facility of new technologies, there is possibility of monitoring the network
at central level to maintain optimal operations. It is in this regard that with the digitization of
network management, a 24/7 visual representation of detailed network status should be monitored.
For this purpose, a network operations center (NOC) could be installed in RBA premises to enable
[47]
permanent visualization of the transmission network status. Through an appropriate network
management system and Operations Support Solution (OSS), the Network Operations Center
should monitor RBA broadcasting network for alarms or certain conditions that may require
special attention in order to avoid impact on network performance. The center should be based on
a complete Network Management Solution (NMS) & Operation Support Solution (OSS)
specifically built to address the needs of the Broadcast industry. It should monitor all SNMP-
enabled devices in a network, providing visualization of their status and measurements from a
single map-based screen. It should then centralize and unify the monitoring and management of
all connected devices across RBA transmission sites. The NMS should enable the centralized
monitoring of multiple equipment of different functionalities and brands for united and efficient
monitoring and control.
As suggested in the findings, routine administrative processes should also be digitized. These
include store or purchase requisition process, field mission forms, documents sharing and contract
management. The objective of this transformation should be the improved collaboration across
RBA departments, increased efficiency by optimizing processes and making workflows faster,
easier, and more efficient because instead of spending hours processing paperwork, there should
be created digital workflows which increase efficiency and allow employees to focus on other
activities, provide a better service both to internal and external stakeholders, and process
optimization. Requisition process should be digitized to enable features such as electronic
processing from the initiation to the final approval, process tracking on fixed or mobile devices,
progress notification to different users by email or SMS, digital signature and automatic report
generation about what has been requisitioned. Field mission process should also be given priority
considering that RBA daily life is based on the movement of employees deployed to all corners of
the country in order to get the required news content. The whole process (from mission request to
mission report) should be digitized and therefore eliminate all related paperwork, resulting in quick
response and reduced headache for all involved parties. Lastly, file sharing which is normally the
practice of distributing or providing access to digital media, such as computer programs,
multimedia (audio, images and video), documents or electronic books is a mandatory feature that
any digital working environment should have within RBA. For this purpose, appropriate
technology is to be selected but it is believed that Cloud-based file syncing and sharing services
that implement automated file transfers by updating files from a dedicated sharing directory on
each user's networked devices are better. Hereby, files placed in this folder also should be typically
accessible through RBA intranet website and mobile app, and could easily be shared with other
users for viewing or collaboration. Specifically, In and outgoing correspondences, working
documents such as procedure manuals, internal rules manual, Staff statute, maintenance manuals
etc. should be accessible on this module. An automated contract management system should also
be installed to improve on the management of contract lifecycle within RBA for maximum
efficiency and limited costs.
In the other hand, it was proved to be very urgent that RBA should align appropriate strategies to
cope with the evolving competition on the national media market. The strategies should include
the good knowledge of RBA competitors, development of a clear unique selling proposition in the

[48]
context of national environment and having a culture of quality function deployment, getting the
correct pricing, definition of entry minimization strategies, conduct a regular market research,
being as innovative as possible and improve on RBA customer service. Innovation should add new
products such as DVD selling, syndication and VOD on the existing package, while exploring
IPTV opportunity. Since technology convergence could also be seen in the angle of competition,
the flourishing of digital platforms such as social media could be handled as competitors to the
traditional radio and TV transmission channels. Today, businesses have already started to use
social media platforms to advertise their products instead of using the traditional channels and it
is in this context that RBA should take care of this fact. However, this study has proved that RBA
community was aware of the opportunities hidden in the social media, even if those opportunities
were not explored yet by RBA in its business model. RBA should therefore be actively present on
all popular social media platforms, and these could be used to advertise and then generate income.
This should be done with clear strategy and well trained staff should be dedicated to that task, with
a separate pricing plan for each platform.
Based on the combination of existing literature on financial performance of companies, market
competition measures and technology convergence as applied to media market environment, and
the findings from this study, the researcher concluded that in aligning appropriate measures
including the good knowledge of RBA competitors, development of a clear unique selling
proposition in the context of national environment and having a culture of quality function
deployment, getting the correct pricing, definition of entry minimization strategies, conduct a
regular market research, being as innovative as possible and improve on RBA customer service in
one hand and by implementing the digital transformation by giving priority to key areas of the
company including sales value chain, the management of transmission network, the routine
administrative processes and document sharing system, the financial performance of RBA could
be boosted. Moreover, the active presence of radio and TV content on the most popular social
media platforms could create huge opportunity for RBA to increase its revenues where advertising
should also be done on each of the platform in a separate strategy according to the nature of the
platform.

[49]
7. Recommendations
Considering the status of financial position of RBA that was found not satisfactory as evaluated
on the period of 5 years from 2014 to 2019, RBA should prioritize the conclusion of this study by
implementing all the proposed solutions to boost its financial performance. Further research should
be conducted in order to identify all the requirements for the effective and efficient digital
transformation and how this should be done for a sustainable financial future within Rwanda
Broadcasting Agency. As the focus of the study was limited to the identification of factors to the
financial performance of Rwanda Broadcasting Agency as an ICT company operating in a high
completion and in a converging technology environment, the researcher didn’t go beyond this
scope. However, clear monitoring and evaluation of the impact that the proposed competition and
technology strategies could generate in regard to the financial health of Media companies should
be of interest for further researches. The research could also be extended to the financial
performance of all public institutions of Rwanda to evaluate their financial performance and its
key factors. It should also be conducted in all private media houses in Rwanda, as the current
targeted only the public sector. For a smooth transition, measures to be undertaken while
implementing the digital transformation should also constitute a research opportunity both for the
public and private sector.

[50]
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[57]
9. Appendices
Appendix 1: Participant Briefing Sheet and Informed Consent Form
Dear Participant,
My name is Gedeon HAKIZIMANA, a student in Master of Communications Management
(MCM), a programme jointly provided by UKTA (United Kingdom Telecom Academy) and UR
(University of Rwanda). At the same time, I am the Planning Engineer at Rwanda Broadcasting
Agency. I would like to thank you in advance for accepting to participate in my survey. The aim
of this survey is to identify key technical strategic factors that can enable RBA as an ICT company
to stay financially healthy in an Emerging Competitive Environment and Global Technology
Converged World.
I am conducting this survey in order to investigate the relationship between RBA’s strategic
management and financial performance in a newly but increasingly competitive market
environment and technology converged world. This is an academic exercise and the results shall
be used to evaluate the student’s capacity towards the completion of Masters of Communications
Management Program and at the same time shall contribute to the improvement of RBA’s strategic
planning for a higher financial performance.

You will be given a short survey which includes a set of questions about financial health of RBA,
the status of competition in Rwandan media market, Technology used in RBA business life and
Strategic orientation for a brighter future for RBA. Kindly note that individual answers will not
be disclosed to any party and it will be only used for study purposes which will be presented as
numbers and percentages.

We appreciate if you complete the survey within 7 Days and to ensure privacy of your answers,
there will be no need to mention your name or disclose your ID. Also after finishing your survey,
you will be asked to send it back through email to gedeon.hakizimana@yahoo.com or
ghakizimana@rba.co.rw or hand it to myself when I will be collecting them on 14 May 2020. You
can also send me filled survey photo through WhatsApp to the number 0788620294.

Kindly note that you have the right to reject or withdraw your participation in this research at any
time. As explained, it is voluntary task, and all data you provided will be deleted and not used in
the survey upon your request.
Thanks you in advance for your participation

Title of the Study:

“Identification of Key Strategic Factors to the Financial Performance of ICT Companies in an
Emerging Competitive Environment and Global Technology Converged World. Case of Rwanda
Broadcasting Agency-RBA.” A dissertation work as partial requirement for the award of Master
of Communications Management Degree.
I would like to invite you to take part in a survey on Key Strategic Factors to the Financial
Performance of RBA as an ICT company in an Emerging Competitive Environment and Global
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Technology Converged World. Before you decide to participate, you need to understand why I am
conducting the survey and what it would involve for you. Please take time to carefully read the
following information and discuss it with others if you wish. You are also allowed to ask questions
if anything you read is not clear or if you would like more information. Take time to decide whether
or not to take part. Thank you for reading this.
Who I Am and What This Study Is About
What is the survey’s purpose?
The purpose of this survey is to discuss RBA’s financial health over the last 5 years and establish
a linkage of such a health to the financing mode and financial management of the company,
highlight and evaluate the rapid level of competition growth in Rwandan media market in order to
establish possible strategies towards a successful RBA Business case and evaluate the impact of
technology convergence in today’s ICT business and propose possible strategic measures key to
RBA performance in such an environment.
Why have you been invited to take part?
You have been chosen to take part in this survey because you qualify and you are believed to be
able to provide useful information about one of the following elements as concerned by the
research.
1. RBA’s financial health
2. Competition growth in Rwandan media market
3. Technology convergence in today’s ICT business
4. Possible strategic measures key to RBA performance

Do I have to take part?

Participation in this research is entirely voluntary. Please note that consent to participate is
implied by you completing and submitting the questionnaire. Please indicate that you have read
and understood the information provided here by signing the provided consent form at the top of
questionnaire. However, you can still withdraw at any time and you do not have to give a reason.

What will happen to me if I take part?

You will be asked to complete a printed copy of questionnaire. Please ensure you complete only
one copy which will have 15 questions. The questionnaire should take approximately 15 minutes
to complete. You may also wish to agree to a follow-up interview to find out more about your
approach.

What are the possible disadvantages and risks of taking part?

Participating in this research is not anticipated to cause you any disadvantages or discomfort. The
potential physical and/or psychological harm or distress will be the same as any experienced in
everyday life.
What are the possible benefits of taking part?

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Whilst there are no immediate benefits for the people participating in this research, it is
believed that this work will have a beneficial impact on how RBA can improve its business
strategies. Results will be shared with RBA Management and further action should be taken
accordingly.
What do I have to do?
Please answer the questions in the questionnaire. There are no other commitments or
lifestyle restrictions associated with participating to this research activity.

Will my taking part in this study be kept confidential?

All data shall be anonymous and no personal, or identifiable information is required as part of this
study. Please ensure you do not disclose either your own or a third party’s personal information
anywhere on the questionnaire. All the information that we collect from you during the course of
the research will be kept strictly confidential. You will not be able to be identified or identifiable
in any reports or publications. Your institution will also not be identified or identifiable. The names
of participating parties will not be identified anywhere. Data collected may be shared in an
anonymized form to allow reuse by the researchers and other third parties. These anonymized data
will not allow any individuals or their institutions to be identified or identifiable.

Will I be recorded, and how will the recorded media be used?

You will not be recorded in any way other than your inputs to the questionnaire without
separate permission being gained from you. .

What type of information will be sought from me and why is the collection of this
information relevant for achieving the research project’s objectives?

The questionnaire will ask you about your opinions and current practices in relation to financial
health, technology in business and strategic management for improved performance within your
institution, RBA. Your views and experience are just what the project is interested in exploring.
What will happen to the results of the research project?
The results of this research shall be used to the purpose of final requirement for the award of
Master’s Degree in Communications Management program as taught by UKTA in partnership
with UR. This is a learning activity and the results can only be disseminated or published in any
journal with the consent of RBA.

Who is organizing and funding the research?

This activity is entirely an academic exercise organized by Mr. Gedeon Hakizimana as the student
in Masters of Communications Management with the responsibility to present a Thesis work as
final requirement for the degree award. The research is jointly funded by ITU, Government of
Rwanda and Rwanda Broadcasting Agency.

Contacts for further information

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Gedeon Hakizimana,
Planning Engineer
Rwanda Broadcasting Agency
Tel: 0788620294, 0722199776
Email: gedeon.hakizimana@yahoo.com, ghakizimana@rba.co.rw

Thank you for taking part in this research.

[61]
Appendix 2: Consent Form
“Identification of Key Strategic Factors to the Financial Performance of ICT Companies in an
Emerging Competitive Environment and Global Technology Converged World. Case of Rwanda
Broadcasting Agency-RBA”.
I participant name, voluntarily agree to participate in the research project titled” Identification of
Key Strategic Factors to the Financial Performance of ICT Companies in an Emerging Competitive
Environment and Global Technology Converged World. Case of Rwanda Broadcasting Agency-
RBA”, conducted by Mr. Gedeon HAKIZIMANA who has discussed the research project with
me.
I have received, read and kept a copy of the information letter/ plain language statement. I have
had the opportunity to ask questions about this research and I have received satisfactory answers.
I understand the purpose, risks and methods of this research. I understands what participating
involves and that I will not benefit directly from participating in this research. I also understand
that in any report on the results of this research my identity will remain anonymous.
I consent to participate in the research project and the following has been explained to me:
 My right to withdraw from the research at any time without any implications to me
 What I am expected and required to do
 Whom I should contact for any complaints with respect to this research
 I am able to request a copy of the research findings and reports
 Security and confidentiality of my personal information

In addition, I consent to:

 Audio-visual recording of any part of or all research activities (if applicable)
 Publication of results from this study on the condition that my identity will not be
revealed.

Respondent profile:

1) Gender: Male Female

2) Level of education: High School Bachelor Master  PhD

3) Age group: 18-25 26-35 36-45 46-55 56+

4) Nationality: Rwandese Expat

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5) Professional experience in RBA: 1-2 years 3-5 years 6-10 years 10+
years

6) Profession: Commercial /Marketing Finance Technical  Legal  Administration

Signature: _______________________________________________________________
Date: _____________________
Researcher names: _____________________________________________(please print)

Signature: _______________________________________________________________
Date: _____________________

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 Appendix 3: QUESTIONS TO BE ANSWERED

Instructions:

This questionnaire has 4 sections and each section is reserved to a group of people within RBA
qualified to provide reliable information. Choose the appropriate section for you and answer
questions accordingly.

Section 1: Financial health of RBA

Section 2: Competition in Rwandan media market
Section 3: Technology used in RBA business life
Section 4: Good practices (Strategies) for a brighter future.

Section one: Financial health of RBA as a company (Mainly Finance Department)

Answer the following questions with YES or NO. Give numbers to support the answer where
possible.
1. Since the last 5 years (2015-2020), RBA’s revenue has known a constant growth.

2. What are the figures for the revenues for the following years:
2014: 2015: 2016: 2017: 2018: 2019:

3. In the last 5 consecutive years (2015-2020), are RBA expenses staying flat? Explain

4. Does RBA cash balance demonstrate positive long-term growth?

5. What is the net margin (Profitability Ratio) of RBA in the 5 consecutive years?
2014: 2015: 2016: 2017: 2018: 2019:

6. What was the impact of Covid-19 on RBA financial health?

Section two: Competition in Media Market in Rwanda (Mainly Finance or Marketing

Department)

1. When did private Radio/TV stations started to operate in Rwanda?

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 2. How many Radio stations operating in Rwanda as of today? (Choose the correct answer)
12 Radio stations
20 Radio stations
5 Radio stations
34 Radio stations
40 Radio stations
Don’t know

3. How many TV stations operating in Rwanda today? (Choose the correct answer)

6 TV stations
10 TV stations
8 TV stations
15 TV stations
18 TV stations
Don’t know

4. The competition created by new entrants into Rwanda Media market brought the former
RBA monopoly to an end.  Yes  No

a. Therefore, RBA net margin was also reduced

Section three: Technology used in RBA Life (All Respondents)

1. Do you agree that technology is key in all business process, especially in today’s context?

2. Does the technology used in RBA cover relevant areas to boost financial performance? If
not, what is missing?
Proposition Occurrence %
The used technology covers all relevant areas of RBA’s life
The used technology doesn’t cover all relevant areas in RBA’s life
Don’t know

3. Is the current technology within RBA enough to enable market competition?

Proposition Occurrence %
The current technology within RBA is enough to enable market
competition

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 The current technology within RBA is not enough to enable market
competition
It (Technology within RBA) needs to integrate some features such
as more automation and electronic transaction
Don’t know

4. Do you believe that the use social media in advertising can increase sales and revenues
for RBA?

Platform Yes No
Twitter
Facebook
Instagram
Website
YouTube

5. How these social media platforms could be used to generate income within RBA?

6. Has the current technology proved to be appropriate enough to mitigate Covid-19

challenges by enabling business continuity during the pandemic lockdown?

Proposition Occurrence %
YES
No
Don’t know

7. What can be added to the current technology within RBA to be enough resilient to chocks
like Covid-19 and deal with national competition?

Proposition Occurrence %
Cloud computing for some services
Disaster recovery system
There must be an e-commerce portal to enable business continuity
Don’t know

8. Do you believe that through technology RBA can improve on its financial health?

Proposition Occurrence %
YES
No
Don’t know

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Section Four: Business Strategy (Mainly Planning, Marketing & Business Development,
Finance,
Administration and Technical Departments).

1. What are the products of RBA on Rwandan market?

2. Does RBA have a culture of doing audience/market survey to know what the public
expects from them?

Proposition Yes No
RBA has a culture of doing audience survey
RBA doesn’t do audience survey
Don’t know

3. Does RBA have a clear unique selling proposition on Rwandan market? Yes or No

RBA have a clear unique selling proposition on Rwandan market

RBA doesn’t have a clear unique selling proposition on Rwandan market
Don’t know

4. Does RBA have a culture of doing/producing what the customers want in its business
life? Yes or No

RBA has a culture of producing what the customers want in its

business life because they regularly do market research
RBA doesn’t have a culture of producing what the customers want in
its business life because they never do market research
Don’t know

5. Are RBA Radio and TV broadcast programs accessible on all social media platforms
popular in Rwanda? Yes or No

Radio & TV programs accessible on Twitter

Radio & TV programs accessible on Facebook
Radio & TV programs accessible on Instagram
Radio & TV programs accessible on Website
Radio & TV programs accessible on YouTube

6. What do you think is more suitable for RBA to boost the profitability (choose one which
you believe is more appropriate) as a company?
a. Increase the prices of some products
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 b. Reduce the number of workers

c. Change the way business is conducted (Digital transformation)

d. Have the QFD culture

7. If digital transformation is what is needed to improve on RBA’s financial health and cope
with the rapid technology changing world, what are the key areas of RBA life do you
think they need a quick transformation?

Routine administrative processes Yes No Why? How

ENG Equipment management
Sales value chain
Management of Transmission Network
Others

8. Today, a telephone can do what a TV, Radio, Newspaper and Computer can do. This is
called technology convergence. In a converged business environment, what do you think
RBA should do to stay on the market and take the lead? Yes or No

Active presence on all platforms and have advertising

rate card for every platform
Continuously consultation with the public to know what
they want
Establishment of more interactivity in all broadcast
programs
Keep Radio & TV traditional transmission channels as
priority
Others

9. What should RBA do to mitigate new competitors? (Answer by Yes or No).

S/N Strategy
01 Know competitors
02 Develop a clear unique selling proposition
03 Get the pricing correct
04 Define entry minimization strategies
05 Conduct a regular market research
06 Be as innovative as possible (new products)
07 Improve RBA customer service

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10. What are the new products that RBA should explore to increase its sales?

[69]
Appendix 4: Statistics on the use of social media platforms in Rwanda

Date Facebook Pinterest Twitter Instagram YouTube LinkedIn VKontakte reddit Tumblr news.ycombinator.com Other
2019-05 81.84 9.94 4.65 1.49 1.86 0.11 0.05 0.01 0.04 0 0.01
2019-06 85.32 8.11 3.91 0.58 1.69 0.17 0.05 0.05 0.1 0.02 0.02
2019-07 83.58 9.31 4.37 0.77 1.74 0.09 0.07 0.03 0.04 0 0
2019-08 79.44 11.54 5.97 0.95 1.78 0.07 0.16 0.05 0.02 0 0.02
2019-09 74.37 13 6.46 1.35 4.48 0.14 0.14 0.04 0.01 0 0.01
2019-10 70.41 12.81 8.48 4.07 3.99 0.05 0.05 0.08 0.03 0 0.02
2019-11 62.25 16.05 12.89 5.24 3.26 0.13 0.04 0.04 0.06 0.01 0.02
2019-12 50.34 18.17 20.41 6.9 3.79 0.17 0.01 0.06 0.13 0.02 0.01
2020-01 63.15 15.13 12.74 6.28 2.49 0.08 0.02 0.06 0.03 0.03 0
2020-02 55.13 18.63 14.04 8.52 3.39 0.15 0.01 0.03 0.05 0.03 0.02
2020-03 75.1 7.12 10.88 4.96 1.74 0.04 0.04 0.05 0.03 0.01 0.02
2020-04 80.25 4.55 9.94 3.91 1.21 0.04 0.02 0.05 0.03 0 0
2020-05 88.87 3.83 5.07 0.53 1.52 0.06 0 0.06 0.04 0.02 0.01
Source: Internet

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